Arteris Plummets 22% Amid AMD Licensing Hype and Sector Turbulence – What’s Next?

Summary
• Arteris (AIP) slumps 22% to $10.14, erasing a $13.00 previous close and trading near its 52-week low of $5.46.
• AMD’s FlexGen IP licensing deal sparks Reddit buzz but fails to halt AIP’s freefall.
• Relative Strength (RS) rating jumps to 96, yet technicals show a bearish divergence with price.

Arteris’ intraday collapse has ignited a frenzy of speculation, with traders dissecting the disconnect between its licensing deal with AMD and its sharp price action. The stock’s 22% drop—its worst single-day decline since 2020—has drawn attention to its volatile position in the semiconductor sector, where AI-driven demand and geopolitical trade tensions are reshaping the landscape. With the stock trading near its 52-week low, the question looms: is this a buying opportunity or a warning sign?

AMD Licensing Deal Sparks Divergence in Price and Sentiment
Arteris’ 22% intraday plunge defies the initial optimism surrounding its licensing deal with AMD, which Reddit communities and sector analysts had highlighted as a potential catalyst. While the deal positions AIP’s FlexGen IP for AI chiplet design, the stock’s collapse suggests market skepticism about execution risks or profit-taking after a recent RS rating surge. The Relative Strength Index (RSI) at 69.11 indicates overbought conditions, but the price action—trading below the 200-day moving average of $8.60—points to a breakdown in conviction. The lack of follow-through buying, despite the licensing news, underscores a fragile technical setup.

Semiconductor Sector Splits as ARM Leads Mixed Performance
The Semiconductor Equipment & Materials sector remains fragmented, with ARM Holdings (ARM) down 1.39% despite AI-driven demand for advanced chip design tools. While ASML and TSMC report record profits from AI and data center demand, smaller players like Arteris face headwinds from geopolitical trade restrictions and overleveraged balance sheets. The sector’s exposure to U.S.-China trade tensions and Trump-era tariffs has created a bifurcation: leaders like ARM benefit from AI scaling, while niche players like AIP struggle with execution risks and liquidity constraints.

Options and Technicals: Navigating AIP’s Volatility with Precision
• MACD: 0.464 (above signal line 0.312), RSI: 69.11 (overbought), Bollinger Bands: $7.97 (lower band) to $11.49 (upper band).
• 200-day MA: $8.60 (below current price), 30-day MA: $9.60 (near-term support).

Arteris’ technicals present a high-risk, high-reward scenario. The stock is trading near its lower Bollinger Band, suggesting oversold conditions, but the RSI’s overbought reading and negative PE ratio (-12.53) indicate caution. For aggressive traders, the AIP20250815P10 put option (strike $10, expiration 8/15) offers leverage with a 20.25% leverage ratio and 85.25% implied volatility. A 5% downside to $9.63 would yield a payoff of $0.37 per contract. The AIP20250815C10 call option (strike $10, 14.46% leverage) is a speculative play, with a -77.42% price change ratio but high gamma (0.247) for volatility sensitivity. Both contracts have high turnover (26,521 and 24,722) and moderate theta decay (-0.0075 and -0.0525), making them viable for short-term directional bets. Aggressive bulls may consider AIP20250815C10 into a bounce above $10.50, while bears should watch for a breakdown below $9.50.

Backtest Arteris Stock Performance
The backtest of AIP's performance after an intraday plunge of at least -22% shows favorable short-to-medium-term gains. The 3-Day win rate is 52.94%, the 10-Day win rate is 50.90%, and the 30-Day win rate is 51.58%, indicating a higher probability of positive returns in the immediate aftermath of such events. The maximum return during the backtest period was 5.89%, which occurred on day 59, suggesting that while there is some volatility, AIP can recover and even exceed its pre-plunge levels.

Arteris at Crossroads: Break Below $9.50 or Rebound to $11.50?
Arteris’ 22% plunge has created a critical juncture for investors. The stock’s proximity to its 52-week low and the sector’s mixed performance—highlighted by ARM’s 1.39% decline—suggest a fragile technical environment. While the AMD licensing deal offers long-term potential, immediate focus should be on whether AIP can hold above $9.50 (30-day support) or retest the $7.97 lower Bollinger Band. A rebound above $10.50 could reignite short-term optimism, but a breakdown below $9.50 would signal deeper bearish momentum. Watch for a decisive move in the next 48 hours—break below $9.50 to confirm a downtrend, or a sharp reversal above $10.90 to validate the AMD-driven narrative.