To The Moon

March 25, 2025 – AMD ( $Advanced Micro Devices(AMD)$ ) soared 7% today, reaching $114.10 when this article was writing, as reports surfaced that the Trump administration may scale back its planned "reciprocal tariffs" set for April 2, potentially sparing semiconductors from the trade measures. The news, which also lifted Nvidia by 3.4% to $121.70, sparked a broader rally in chip stocks, with investors breathing a sigh of relief over reduced trade tensions. For AMD, this marks a continuation of a strong rebound, with the stock climbing 20.4% from its March 11 low of $94.73. But what’s driving this surge, and can the momentum hold? Let’s break down the factors, fundamentals, technicals, and what’s next for AMD.

AMD

A Month of Gains for AMD

AMD’s stock has been on a tear since hitting a low of $94.73 on March 11, 2025. Over the past two weeks, the semiconductor giant has gained 20.4%, fueled by sector tailwinds and today’s tariff news. The stock’s 7% jump on March 25 alone reflects firm market conviction, with trading volume spiking to 245.82K shares—a sign of robust buying interest. This rally has pushed AMD above key technical levels, including the 50-day moving average ($108), and it’s now testing the 200-day moving average around $114-$115. The question now is whether this upward trajectory can continue or if it’s at risk of stalling.

Drivers Behind the Rally

The immediate catalyst for today’s surge is the reported shift in Trump’s tariff policy. Sources like Yahoo Finance and Bloomberg indicate that the White House is narrowing the scope of its April 2 tariffs, potentially excluding semiconductors, automobiles, and pharmaceuticals. For AMD, this is a significant relief—tariffs could have increased production costs, squeezed margins, or disrupted supply chains, all of which would have hit the chipmaker hard. The market’s reaction was swift, with the Dow gaining 400 points on March 24 and the Nasdaq joining the rally today, reflecting a broader risk-on sentiment.

Beyond the tariff news, AMD is riding a wave of sector momentum. The semiconductor industry has been a bright spot in the tech sector, driven by insatiable demand for AI and data centre chips. AMD’s Instinct MI300 series has been gaining traction in the AI space, positioning the company as a viable competitor to Nvidia, albeit at a smaller scale. With a forward P/E ratio of around 35—more attractive than Nvidia’s 50+—AMD has become a go-to pick for investors seeking growth at a reasonable valuation.

Fundamental Industry Background

The semiconductor industry remains a cornerstone of the global economy, with AI and data centres driving unprecedented demand for high-performance chips. AMD has been steadily gaining market share in both CPUs and GPUs, particularly in the data centre segment, where its EPYC processors and Instinct GPUs are making inroads. While Nvidia dominates the AI chip market, AMD’s lower price point and strong performance have appealed to cost-conscious buyers, helping the company carve out a niche. Additionally, the broader market environment is supportive, with Bitcoin hitting $87K and the PHLX Semiconductor Index (SOX) likely seeing gains alongside AMD and Nvidia. This sector tailwind, combined with tariff relief, has created a perfect storm for AMD’s recent gains.

Technical Analysis: What the Chart Says

A look at AMD’s daily chart reveals a stock with strong momentum but nearing a critical juncture. The price has broken above the 50-day moving average ($108) and is now testing the 200-day moving average ($114.42), a level that has acted as resistance in the past (notably in late January 2025). The Relative Strength Index (RSI) sits at 62.89, in upper-neutral territory, indicating room for more upside before the stock becomes overbought (typically above 70). The MACD shows a bullish crossover, with the histogram trending upward, confirming the rally’s strength.

Volume is another positive signal—today’s spike to 245.82K shares suggests strong buyer conviction. However, AMD is approaching the upper Bollinger Band, which often acts as a dynamic resistance. A break above this level with sustained volume could signal further gains, while a rejection might lead to a pullback. Key support levels to watch include $108 (50-day MA) and $104 (a recent consolidation zone), with resistance at $114-$115 and $122 (a prior high from January 2025).

AMD Chart

Sustainability of the Rally

AMD’s rally has solid legs, but its sustainability hinges on several factors. On the bullish side, confirmation of the semiconductor tariff exclusion could provide a longer-term boost, removing a major overhang for the sector. A decisive break above the 200-day MA ($114.42) with strong volume could propel AMD toward $122, representing another 7% upside. Continued strength in the broader market—Nasdaq, Dow, and the semiconductor sector—would also support the rally, as would AMD’s fundamentals in AI and data centres. The company’s next earnings report, expected in late April or early May 2025, will be crucial—strong guidance could keep the momentum alive.

However, risks loom. If Trump’s administration reintroduces tariffs on semiconductors, the rally could reverse quickly. The $114-$115 resistance level is a key test, and a failure to break through, combined with an overbought RSI, might trigger a pullback to $108 or $104. Profit-taking after today’s 7% jump is another concern, as is the broader macro environment—rising interest rates, inflation, or geopolitical tensions could dampen risk appetite, hitting growth stocks like AMD.

Stock Price Action Forecast

In the near term (next few weeks), AMD’s rally looks poised to continue if the tariff exclusion is confirmed and the stock breaks above $114.42 with sustained volume. A move to $122 is a realistic target, with $130 (upper Bollinger Band projection) possible in a strong bullish scenario. However, if resistance holds and tariff uncertainty resurfaces, a pullback to $108 or $104 is likely. In the long term, AMD’s fundamentals remain strong, but short-term volatility tied to trade policy and technical levels could create choppiness. Investors should watch key levels—support at $108 and $104, resistance at $114.42 and $122—and monitor RSI, MACD, and volume for signs of a trend shift.

AMD’s 20.4% rebound from its March low has been impressive, and today’s tariff-driven surge underscores the market’s confidence in the chipmaker. While the rally has room to run, its path forward will depend on policy clarity, technical breakouts, and broader market conditions. For now, AMD remains a stock to watch in the semiconductor space.

@TigerWire