AMD Options Signal Bullish Breakout Potential Amid AI Strategy Hype – Here’s How to Play It

• AMD shares trade near $242, down 1.9% on mixed technicals and heavy call open interest at $260–$300 strikes.
• Options data shows a 0.93 put/call OI ratio, with block trades hinting at long-term bullish positioning.
• CEO Lisa Su’s AI expansion plans and Q3 $9.25B revenue could fuel a rebound above $248.10 (Bollinger middle band).

Here’s the core insight: AMD’s options market is pricing in a high-stakes bet on AI-driven growth, with heavy call open interest at $260+ strikes and block trades suggesting institutional confidence. While short-term technicals hint at volatility, the long-term bullish case remains intact—but only if key support levels hold.

The Bullish Battle at $260 and the Shadow of $220 Puts

Let’s start with the options data. This Friday’s top OTM calls are clustered at $260 (OI: 23,895), $300 (OI: 15,654), and $270 (OI: 13,714). That’s not random—it’s a signal. Traders are hedging a potential breakout above $248.77 (today’s high) or a rally to $260, where call open interest peaks. The histogram shows MACD divergence (bullish), but RSI at 44.22 means momentum isn’t extreme.

On the downside, puts at $220 (OI: 12,482) and $200 (OI: 12,328) suggest some fear of a drop below $234.02 (30D support). The put/call ratio of 0.93 leans slightly bearish, but it’s not a red flag—more of a “stay alert” signal.

Now, the block trades: A 1,500-contract call (AMD20251017C165) and a 1,600-contract put (AMD20250919P155) hint at big players hedging long-term bets. These aren’t short-term speculators—they’re positioning for AMD’s AI push in 2025.

Why the AI Strategy Could Outpace the Bearish Noise

AMD’s recent Financial Analyst Day painted a bold picture: MI450 GPUs in 2026, EPYC CPUs targeting 50% server market share, and Ryzen AI PCs with 10x performance gains. Lisa Su’s roadmap isn’t just hype—it’s a $1 trillion compute market play.

But here’s the catch: The market is still waiting for proof. Q3 revenue hit $9.25B (+36% YoY), but Nvidia’s AI dominance and recent GPU price hikes have traders second-guessing AMD’s execution. The good news? Mizuho raised its price target to $285, and the options data shows traders are pricing in a $300+ rally.

Actionable Trade Ideas: Calls for the Breakout, Puts for the Safety Net

For options traders, the $260 call (AMD20251017C260) expiring this Friday is a high-conviction play if AMD closes above $248.10 (middle Bollinger band). The RSI isn’t screaming “buy,” but the heavy OI at $260 suggests a liquidity trap—if the price breaks through, this strike could see a gamma squeeze.

For next Friday, the $250 call (AMD20251024C250) with OI: 3,510 is a safer bet. If AMD holds above $234.02 (30D support), this strike offers a 10–15% return if the stock gaps up.

On the bearish side, the $220 put (AMD20251017P220) is a deep OTM hedge. If AMD drops below $234.02, this put could cap losses while the stock tests 200D support at $111.71 (unlikely, but not impossible).

For stock traders, consider entry near $234.02 if the 30D support holds. A break above $248.10 (middle Bollinger band) would validate the bullish case, with a target at $268.88 (upper Bollinger band). A stop-loss below $232.81 (30D support) would protect against a deeper selloff.

Volatility on the Horizon: Balancing AI Hype and Real Risks

AMD’s story is a classic “long-term bullish, short-term volatile” setup. The options market is pricing in a $300+ rally, but technicals warn of a pullback to $220–$234. The key is to play both sides: a bullish call if the stock breaks above $248.10, and a put if it slips below $234.02.

The AI strategy is sound, but execution matters. If AMD misses its MI450 launch or struggles to close the AI gap with Nvidia, the $220–$200 puts could see action. For now, though, the data points to a stock on the cusp of a breakout—but only if it can hold its ground above critical support.