AMD Plummets 4.3% Amid Semiconductor Sector Turmoil: What's Fueling the Selloff?

Summary
• AMD trades at $162.915, down 4.3% from its intraday high of $166.65
• SoftBank’s $2B Intel investment sparks selloff in rival chipmakers
• Sector leader NVDA declines 1.6%, while Intel surges 7%
• AMD’s 52W high of $186.65 now 13% below current price

Advanced Micro Devices (AMD) faces a sharp intraday selloff as strategic moves by Intel and SoftBank trigger a sector-wide recalibration. With the stock trading 4.3% below its opening price of $164, investors are reevaluating the competitive landscape amid shifting capital allocations and geopolitical semiconductor dynamics.

SoftBank's $2B Intel Investment Ignites AMD Sell-Off
AMD’s 4.3% decline stems directly from SoftBank’s $2 billion investment in Intel, which vaulted the latter’s shares 7% post-announcement. This move positioned Intel as a strategic beneficiary of U.S. government manufacturing incentives, creating a stark contrast with AMD’s stagnant capital inflows. Analysts highlight that the investment underscores Intel’s role in national security initiatives, including potential government equity stakes, while AMD’s high valuation (P/E of 102) and recent acquisition-driven AI expansion face scrutiny. The selloff reflects a knee-jerk reaction to perceived neglect in the sector’s capital allocation hierarchy.

Semiconductor Sector Volatility Intensifies as Intel Surges
The semiconductor sector remains in flux as Intel’s 7% rally contrasts with AMD’s 4.3% drop and NVDA’s 1.6% decline. SoftBank’s investment and U.S. government interest in Intel have created a bifurcated market narrative: Intel benefits from direct capital infusions and policy tailwinds, while AMD and NVDA face valuation pressures amid aggressive competition. The sector’s mixed performance highlights divergent investor sentiment toward companies leveraging geopolitical manufacturing incentives versus those relying on organic growth and R&D-driven differentiation.

Options and ETFs Signal Short-Term Volatility: Strategic Plays for AMD Bear Market
• MACD: 6.49 (bearish divergence from 8.18 signal line)
• RSI: 40.28 (oversold territory)
• Bollinger Bands: Lower band at $159.72 (critical support)
• 200D MA: $124.51 (far below current price)
• AMDW ETF: -2.11% (mirrors AMD’s bearish momentum)

AMD’s technicals suggest a short-term bearish bias despite long-term bullish fundamentals. Key levels to watch include the $159.72 lower Bollinger Band and the 200D MA at $124.51. The Roundhill AMD WeeklyPay ETF (AMDW), down 2.11%, offers leveraged exposure to the selloff but requires caution due to its high volatility. For options, two contracts stand out:

• AMD20250829P157.5 (Put):
- Strike: $157.50 | Expiry: 2025-08-29 | IV: 48.75% | Delta: -0.316 | Theta: -0.0003 | Gamma: 0.027 | Turnover: $1.05M
- IV (high volatility) | Delta (moderate bearish sensitivity) | Gamma (strong price responsiveness)
- This put option offers asymmetric upside in a 5% downside scenario, with a projected payoff of $5.42 per contract. Its low theta suggests minimal time decay, making it ideal for short-term bearish bets.

• AMD20250829C165 (Call):
- Strike: $165 | Expiry: 2025-08-29 | IV: 49.13% | Delta: 0.461 | Theta: -0.567 | Gamma: 0.0299 | Turnover: $2.95M
- IV (high volatility) | Delta (moderate bullish sensitivity) | Gamma (strong price responsiveness)
- This call option provides a 5% downside hedge with a projected payoff of $1.59 per contract. Its high gamma ensures responsiveness to price swings, while the 49.13% IV reflects market uncertainty.

Aggressive bears should target AMD20250829P157.5 if $159.72 breaks, while cautious bulls may consider AMD20250829C165 for a potential rebound above $165.

Backtest Advanced Micro Devices Stock Performance
After an intraday plunge of at least -2%, AMD has historically shown positive short-to-medium-term gains. The backtest data reveals favorable win rates and returns for 3, 10, and 30 days following such events:1. 3-Day Performance: The win rate is 53.92%, with an average return of 0.75% within 3 days. The maximum return during this period is 6.79%, achieved on day 59.2. 10-Day Performance: The win rate increases to 51.96%, with an average return of 1.33%. The maximum return is 6.79%, still on day 59.3. 30-Day Performance: The win rate remains high at 52.94%, with an average return of 3.43%. The maximum return is 6.79%, which occurs on the same day as the 3-day and 10-day maxims. These results suggest that while there is some volatility immediately following a -2% intraday plunge, AMD often rebounds and can generate positive returns in the following days. Investors might consider these findings when assessing the potential impact of such events on their investment strategy.

AMD Faces Crucial Support Test: Immediate Action Required
AMD’s 4.3% intraday drop has brought its price perilously close to the $159.72 lower Bollinger Band and the 200D MA at $124.51. The stock’s short-term bearish bias, driven by sector capital reallocation and valuation pressures, contrasts with its long-term AI-driven growth potential. Investors must monitor the $159.72 support level and the $165 resistance for directional clues. With sector leader Nvidia (NVDA) down 1.6%, the semiconductor sector remains volatile. Watch for a breakdown below $159.72 or a rebound above $165 to dictate next steps—aggressive shorting or strategic long entry.