AMD Plummets 3.3% Amid Regulatory Turmoil and Sector Uncertainty: What’s Driving the Selloff?

Summary
• AMD’s intraday price drops to $211.25, a 3.3% decline from its $222.92 open.
• Sector leader Intel (INTC) defies the trend with a 1.3% intraday gain.
• Options volatility spikes, with 20 contracts trading above 45% implied volatility.
• Trump’s executive order targeting Chinese-linked chip assets and TSMC’s China licensing approval dominate sector news.
Advanced Micro Devices faces a sharp intraday selloff amid a volatile semiconductor landscape. With the stock trading at $213.79, down from a $222.92 open, the move reflects broader regulatory tensions and sector-specific pressures. The selloff coincides with Trump’s directive to unwind Chinese-linked chip acquisitions and TSMC’s renewed China operations, creating a tug-of-war between geopolitical risks and manufacturing optimism.

Regulatory Overhang and Sector Divergence Fuel AMD’s Slide
AMD’s intraday decline is driven by a confluence of regulatory headwinds and sector fragmentation. Trump’s executive order targeting Chinese-linked firm HieFo has intensified fears of U.S. policy shifts disrupting global chip supply chains. Meanwhile, TSMC’s recent approval to import U.S. tools into China has created a bifurcated narrative: while manufacturing continuity is secured for some, others like AMD face heightened scrutiny over geopolitical exposure. The stock’s 3.3% drop aligns with a broader selloff in AI-chipmakers, as Chinese demand for H200 chips and U.S. licensing delays cast uncertainty over long-term revenue visibility.

Semiconductor Sector Splits: Intel Gains as AMD Loses Ground
The semiconductor sector is exhibiting divergent trends, with Intel (INTC) rising 1.3% intraday while AMD falls 3.3%. Intel’s outperformance suggests market confidence in its U.S.-centric manufacturing strategy and recent AI infrastructure deals. In contrast, AMD’s exposure to Chinese markets and regulatory scrutiny—exacerbated by Trump’s HieFo directive—has triggered a risk-off sentiment. This divergence highlights the sector’s fragmentation between companies with diversified supply chains and those reliant on U.S.-China tech interdependence.

Options Playbook: Capitalizing on Volatility and Key Levels
• MACD: -0.73 (bearish divergence), RSI: 61.03 (neutral), Bollinger Bands: $201.13–$228.19 (current price near middle band)
• 200-day MA: $163.81 (far below current price), 30-day MA: $214.15 (resistance near $214.85)
• Key support: $201.13 (lower band), resistance: $228.19 (upper band).
AMD’s technicals suggest a short-term bearish bias amid regulatory uncertainty. The stock is trading near its 30-day MA but remains above critical support levels. A breakdown below $201.13 could trigger a retest of the 200-day MA. While no leveraged ETF data is available, the options chain offers high-conviction plays for directional bets.
Top Options Picks:
• AMD20260116C220 (Call, $220 strike, Jan 16 expiry):
- IV: 47.14% (moderate), Leverage Ratio: 47.21% (high), Delta: 0.386 (moderate), Theta: -0.600 (high time decay), Gamma: 0.0219 (high sensitivity).
- Payoff: In a 5% downside scenario (ST = $203.10), payoff = max(0, $203.10 - $220) = $0. This call is a high-risk, high-reward play for aggressive bulls expecting a rebound above $220.
• AMD20260116C225 (Call, $225 strike, Jan 16 expiry):
- IV: 47.20% (moderate), Leverage Ratio: 71.05% (very high), Delta: 0.286 (moderate), Theta: -0.492 (high time decay), Gamma: 0.0194 (high sensitivity).
- Payoff: In a 5% downside scenario (ST = $203.10), payoff = max(0, $203.10 - $225) = $0. This contract offers amplified exposure to a potential rebound, ideal for traders betting on a sharp reversal.
Action Insight: Aggressive bulls may consider AMD20260116C220 into a bounce above $220, while AMD20260116C225 suits those expecting a sharper rebound. Both contracts benefit from high gamma and moderate delta, offering liquidity and leverage in a volatile environment.

Backtest Advanced Micro Devices Stock Performance
After experiencing a -3% intraday plunge from 2022 to the present, AMD has shown a mixed performance in the subsequent days. The backtest data reveals that 52.82% of the days resulted in a positive return within three days, while the corresponding figure for ten days was 49.60%. However, the win rate decreased to 49.40% over thirty days. The average returns were positive, with an overall return of 0.56% over three days, 1.14% over ten days, and 3.51% over thirty days. The maximum return during the backtest period was 7.04%, which occurred on day 59 after the plunge.

AMD at Crossroads: Watch for $201.13 Support and Sector Catalysts
AMD’s intraday selloff reflects a fragile balance between regulatory risks and sector-specific optimism. The stock’s ability to hold above $201.13 (lower Bollinger Band) will determine its near-term trajectory, with a breakdown signaling a retest of the 200-day MA. Meanwhile, Intel’s 1.3% gain underscores the sector’s divergence, highlighting the importance of geopolitical positioning. Traders should monitor Trump’s executive actions on Chinese-linked firms and TSMC’s China operations for directional clues. A decisive move above $228.19 (upper Bollinger Band) could reignite bullish momentum, but until then, caution is warranted. Watch for $201.13 breakdown or regulatory reaction.