As Trump Hits AMD MI325X Chips with a 25% Tariff, How Should You Play AMD Stock?

Group 1: Tariffs and Market Impact - The U.S. government has announced a 25% tariff on semiconductor equipment, specifically targeting AMD's MI325X chips and Nvidia's H200 chips, aimed at promoting local manufacturing and reducing foreign reliance [1] - Startups, domestic data centers, the public sector, and chips for local manufacturing are exempt from these tariffs, while Nvidia has been allowed to export H200 chips to China despite recent restrictions from Chinese authorities [2] Group 2: Company Performance and Growth - AMD's stock has nearly doubled in the last 12 months, outperforming the iShares Semiconductor ETF (SOXX), which gained 53% during the same period, largely due to AMD's partnership with OpenAI amid rising AI spending [4] - AMD's forward price-to-earnings (P/E) ratio is 41 times, which is high but consistent with its five-year historical average, while its forward price-to-book value of 6.1 times is at an 11% discount to its historical average [5] - AMD is projected to grow its earnings per share (EPS) by 77% by 2026, contributing to its high forward P/E and increasing relevance in AI applications [6]