Core Viewpoint - AMD benefits from a newly signed AI chip agreement in the Middle East and successfully withstands price competition from Intel, leading HSBC to upgrade its investment rating on AMD [1][2]. Group 1: Market Conditions and Stock Performance - The easing of the US-China tariff war and the AI chip supply agreement signed by Saudi Arabia have prompted a reassessment of AMD's stock price, despite limited or unquantifiable impacts on earnings [1]. - Since the US-China decision to pause tariffs for 90 days on May 12, AMD's stock has risen by 7%, with the annual price-to-earnings (P/E) ratio increasing to 29 times [1]. - HSBC raised AMD's P/E target from 20 times to 26 times and adjusted the 2026 revenue forecast for AMD's GPU from $6.6 billion to $7.7 billion, primarily due to a 15% increase in the deployment of advanced packaging technology "CoWoS" [1]. Group 2: Competitive Position and Future Outlook - HSBC has become more optimistic about AMD's client segment, believing the company can successfully fend off Intel's competition and expand its market share [2]. - Initially, HSBC expected Intel to engage in price competition to regain market share, but this did not have a significant impact as AMD's pricing was already competitive, and its advanced CPUs made its product line more attractive [2]. - As a result, HSBC upgraded AMD's investment rating from "reduce" to "hold" and raised the target price from $75 to $100 [2]. - AMD's stock rose by 3.85% to $114.56 on the 27th, with the year-to-date decline narrowing to 5.16% [2]. - AMD signed a $10 billion contract with Saudi AI company Humain to build AI infrastructure over the next five years, which is seen as a positive development that could help AMD and Nvidia mitigate the impact of US export controls [2].