With the Trump administration firmly locked in a trade war with key economic partners, the framework for growth-oriented enterprises — particularly those tied to the technology sector — suddenly began looking unappealing. After some stellar performances in years past, semiconductor giant Advanced Micro Devices (NASDAQ:AMD) is looking rather pedestrian.
Since the beginning of January, AMD stock lost just over 12% of market value. To put this figure into perspective, the S&P 500 is down 3.5% during the same period. AMD is also conspicuously underperforming the tech-focused Nasdaq Composite, which is down 8% year-to-date. Nevertheless, those hoping for a temporary pop could get their wish.
Following Wednesday's close, AMD stock encountered unusual options activity; specifically, Barchart noted that options flow showed net trade sentiment of over $1.89 million, strongly favoring the bulls. Options flow focuses exclusively on big block transactions likely placed by institutional investors. Put another way, it’s activity that helps move the market.
Interestingly, the most bullish transaction during the midweek session was for 200 contracts of $105 calls expiring Dec. 19, 2025. The premium paid was $346,000, meaning that the ask came out to $17.30 (or $1,730 for every 100 shares). Stated differently, the breakeven point for AMD stock comes in at $122.30. That’s a fairly decent indicator that shares could rise from here.
It’s also a very reasonable projection. In early January, AMD stock closed at almost $130. Breaking even on this trade is quite doable within short order. Plus, AMD is enjoying near-term momentum, gaining almost 7% in the trailing five sessions.
For those who want to scalp some profits to the upside, it’s time to put Advanced Micro on the radar. But how long can sentiment stay positive?
While AMD stock started off 2025 on the wrong foot, technical dynamics suggest that it may have printed a near-term bottom at around the $97 level. It’s worth pointing out that shares didn’t stay below $100 for too long. That’s a positive sign since $100 represents an obvious psychological and technical milestone.
Moreover, AMD stock benefits from an upward bias. Using pricing data since January 2019, a long position held for any given eight-week period has a nearly 57% chance of being profitable. But under certain dynamic conditions — in this case, sizable momentum of between 5% and 10% in a one-week period — this eight-week probability declines to 51%.
Still, that’s not necessarily a sign to give up on AMD stock. Statistically, when AMD encounters positive momentum, the long odds have a tendency of being pushed forward. So, in the second week following sizable-magnitude greed, the probability of a long position being profitable jumps to nearly 62%. That’s noticeably above the baseline second-week odds of 55.4%.
Based on prior statistical trends, AMD stock has a chance of reaching over $113 by the options chain expiring April 4. With that in mind, speculators could consider buying the April 4 $107 call at an ask of $3.40 (or $340 over 100 shares). The breakeven price for the purchase of this premium would be $110.40, providing a sizable profit should AMD reach $113 or above.
However, I don’t want to speculate beyond the April timeframe until I receive additional information. I am suspicious that AMD stock may be in the middle of charting a long-term bearish head-and-shoulders pattern.
For now, consider this short-term swing trade — and we’ll reconvene later.
