Advanced Micro Devices Inc. (AMD) caught a bid Monday morning after reports emerged that Alibaba Group Holding Ltd (BABA) might be preparing a substantial order for AMD's latest AI hardware. It's exactly the kind of news the chipmaker needed after last week's turbulence.
The Alibaba Order
According to MLex, Alibaba is weighing an order of between 40,000 and 50,000 units of AMD's MI308 AI accelerators. That's not a small number. This development offers a powerful rebuttal to the pessimistic narrative that hammered the stock last week, when investors worried about China's growing domestic semiconductor capabilities.
Just days ago, AMD stumbled after reports surfaced about a Chinese breakthrough in EUV lithography technology. The concern was straightforward: if China can produce advanced chips domestically, why would Chinese companies keep buying from Western suppliers?
The potential Alibaba deal directly challenges that logic. It signals that China's top-tier tech companies still depend on superior Western silicon to power their artificial intelligence ambitions, at least for now. When you're racing to build out AI infrastructure, you apparently can't wait for domestic alternatives to catch up.
What It Means for AMD
Beyond the geopolitical angle, the sheer size of this potential order validates AMD's MI308 as a commercially viable alternative to Nvidia's dominant H-series chips in the hypercompetitive data center market. That matters because investors have been questioning whether AMD can genuinely capture meaningful share in AI accelerators or if Nvidia will continue its near-monopoly.
This vote of confidence from a global tech giant should help ease lingering concerns about demand sustainability. Those worries had been amplified by recent uncertainties surrounding Oracle's data center financing plans.
The timing works in AMD's favor too. Coming after Micron Technology's strong earnings report last week, which already started lifting semiconductor stocks, this news provides the specific fundamental catalyst AMD needed to reverse recent technical weakness.
The Numbers Tell a Story
Despite some bearish short-term price action, AMD maintains strong fundamentals. The company scores an impressive 91.14 on growth metrics, underscoring its solid trajectory even as the stock navigates technical headwinds.
Price Action and Technical Setup
Advanced Micro Devices shares were up 0.27% at $214.00 at the time of publication Monday. The current price sits 6.2% below a key resistance level, which could present challenges for upward momentum in the near term. On the flip side, the stock remains comfortably positioned, trading 35.9% above a critical support level that has provided a solid foundation.
Technical indicators suggest AMD is at something of a crossroads. A push above recent highs could attract momentum buyers and trigger additional upside. Conversely, a drop below recent lows might trigger selling pressure and test those underlying support levels that have held firm so far.
The question now is whether this Alibaba news provides enough fuel to break through that overhead resistance, or if investors will need to see the order actually materialize before committing fresh capital.