AMD Options Signal Bullish Breakout Potential: Calls at $220–$230 Dominate as AI Partnership Hopes Rise

• AMD trades at $215.04, up 0.07% with volume surging past 7.8M shares.
• Call open interest peaks at $220–$230 strikes (this Friday’s expiry), while puts cluster at $185–$200.
• Raymond James upgrades AMD to Outperform with a $337 target, citing AI partnership momentum.

Here’s the takeaway: options market sentiment and technicals align for a bullish bias, with key resistance at $215.13 and a MACD crossover hinting at near-term upside. But let’s dig into why this setup matters—and where the risks lie.

Bullish Fireworks at $220–$230, but Puts Hedge a Potential Stumble

The options chain tells a story of cautious optimism. For this Friday’s expiry (Dec 26), the AMD20251226C220 and AMD20251226C225 calls dominate open interest, with 11,649 and 10,307 contracts outstanding, respectively. That’s not just noise—it’s a vote of confidence from options traders betting AMD will break above its 30-day resistance ($215.13) and test the $220 level.

But don’t ignore the puts. The AMD20251226P185 put leads with 15,290 OI, suggesting some players are hedging against a sharp pullback. Why? The RSI at 47.35 hints at a potential rebound, but the Bollinger Bands show the stock is still near the lower band ($200.56), leaving room for volatility.

Block trades add intrigue. A 1,500-lot buy of the AMD20251019C165 call in September and a 1,600-lot put purchase (AMD20250919P155) suggest institutional players were positioning for both AI-driven gains and downside protection. It’s a classic “buy the rumor, sell the news” playbook—but with AMD’s recent $9.2B Q3 revenue, the rumors might still have legs.

AI Partnership Hype Fuels the Narrative—But Can It Sustain the Buzz?

The news flow is all about China. Raymond James estimates AMD could gain $500M–$800M if U.S. export restrictions ease, with Alibaba rumored to order tens of thousands of MI308 AI chips. That’s a smaller upside than Nvidia’s $7B–$12.5B potential, but AMD’s 36% YoY revenue growth and OpenAI endorsement make it a credible contender.

Wall Street’s “Strong Buy” consensus (29 buys in 3 months) reinforces this. However, the market’s reaction to similar AI hype in 2024 shows that execution matters. If Alibaba’s order materializes, AMD could surge toward $280. But if the news fades, the 200D MA at $159.77 remains a distant floor—though the 30D MA at $219.68 offers closer support.

Trade Ideas: Calls for Breakouts, Puts for Protection

For options traders, the AMD20260102C220 (next Friday’s expiry) is a prime candidate. With 9,517 OI and a strike just above current resistance, it offers leverage if AMD cracks $220. A stop-loss below $213.91 (30D support) would limit risk.

Stock buyers could consider entries near $213.91–$214.00, targeting a breakout above $215.13. A successful move past $220 would aim for $227.44 (Bollinger Upper Band), while a failure to hold $213.91 could trigger a test of the $200.56 middle band.

Bearish players might use the AMD20260102P200 put (3,330 OI) to hedge a pullback, especially if the stock dips toward the 200D support ($160.10). A put/call spread between $200 and $185 could cap losses while staying in play for a rebound.

Volatility on the Horizon: Positioning for AMD’s AI-Driven Ascent

The data paints a clear picture: AMD is primed for a breakout, backed by options positioning, technical indicators, and AI-driven news. But the road isn’t without potholes. A failure to hold $213.91 could invite profit-taking, while macroeconomic headwinds (e.g., Fed policy, China’s regulatory climate) remain wild cards.

For now, the call-heavy options chain and Raymond James’ $377 target suggest the market is pricing in a best-case scenario. If you’re in, ride the momentum—but keep a tight stop. If you’re on the sidelines, watch for a pullback to $200.56 as a potential entry point. Either way, AMD’s next move could be a holiday gift for traders who spot the setup early.