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Citi maintained its Neutral rating on Advanced Micro Devices(NASDAQ:AMD) following a reported deal to give 15% of revenues from Chinese AI chips sales to the U.S. government in exchange for export licenses.
Nvidia (NVDA), reportedly, will share 15% of revenue from sales of its H20 AI accelerator in China, while AMD is expected to contribute an identical share from its MI308 chip revenues.
“We view this as not material given the low margins of these products and these AI GPUs could be banned in China again. We believe the mainstream MI355 and MI400 products will be the main driver of EPS and the stock and continue to expect AMD’s AI business to grow 23% YoY to $6.2 billion in 2025 and 58% YoY to $9.9 billion in 2026,” said analysts led by Christopher Danely.
The firm also maintained its $180 price target on AMD’s stock.
Meanwhile, analysts at BofA maintained their Buy ratings on Nvidia and AMD following the reported deal, calling it an incremental positive.