TLDR
- AMD shares fell following new U.S. licensing requirements on AI chip exports to China
- The company expects charges up to $800 million related to its MI308 GPU exports
- AMD stock has tumbled 28% year-to-date and 43% over the past 12 months
- Multiple chip stocks affected including Broadcom, Micron, and Nvidia
- Technical analysis shows important support levels at $76 and $65
AMD shares continued their downward trend following the announcement of new U.S. government restrictions on AI chip exports to China. The stock dropped 0.9% to $87.50 on Thursday, extending losses that began Wednesday when news of the export controls first broke.
The new licensing requirements affect several U.S. chipmakers with operations in China. While not an outright ban, analysts note that no licenses appear to have been granted so far.
AMD disclosed in a regulatory filing that it expects to face charges of up to $800 million related to the export of its MI308 graphics processing unit. This chip is designed for compute-intensive applications such as AI and gaming.
The restrictions also impact other major semiconductor players. Nvidia shares fell 2.9% to $101.44, while Broadcom dropped 0.9% to $172.96, and Micron Technology declined 2.6% to $67.56.
The changes mark what Wedbush analyst Daniel Ives called “the first shots fired in the trade war in the tech world.” He described it as “just the beginning of what is going to be a long and drawn-out process between the U.S. and China.”
Technical Picture Shows Weakness
AMD’s stock has been under pressure even before these new trade restrictions. Shares have tumbled 28% since the start of the year and lost 43% of their value over the past 12 months.
Concerns about slowing AI infrastructure spending and AMD’s struggle to capture market share from industry leader Nvidia have weighed on investor sentiment. The recent trade policies from the Trump administration have only added to the uncertainty.
Technical analysis reveals that AMD shares broke below the neckline of a head and shoulders formation in December. This bearish pattern preceded a sharp downtrend that continued until last week’s rebound.
That bounce created what traders call a “piercing pattern” – a two-day candlestick formation that often signals a potential reversal from downtrend to uptrend. However, selling resumed this week, pushing the relative strength index (RSI) back toward oversold territory.
Key Price Levels to Watch
For investors tracking AMD’s stock, several important price levels may determine future movement. The first major support level sits around $76, near last week’s low and aligning with trading activity dating back to September 2020.
If the stock breaks below that level, the next support zone appears at $65, near the December 2022 retracement low. This area marked the beginning of a 14-month uptrend in the stock.
On the upside, resistance appears around $116, where the 200-week moving average, last month’s high, and other technical factors converge. A more substantial reversal could potentially target $150, though multiple obstacles stand in the way.
AMD has indicated it plans to apply for export licenses under the new rules. However, the company acknowledged there are “no assurances” these will be granted.
The impact extends beyond AMD. Products affected by the export restrictions include Nvidia’s H20 chip and any others with similar memory or bandwidth specifications.
KeyBanc analyst John Vinh responded by lowering his 2025 estimates for AMD’s revenue and earnings per share by 7% and 13% respectively. He maintained a Sector Weight rating on the shares.
Some analysts see a potential silver lining. Jefferies highlighted multiple positive signals for AI demand, though they noted Nvidia’s stock is unlikely to perform well “until these AI rules and tariff impacts are better understood.”
The broader semiconductor sector has struggled this year. The iShares Semiconductor exchange-traded fund has dropped over 20% year-to-date and was down another 0.7% on Thursday.
Taiwan Semiconductor Manufacturing provided some relief with its recent earnings report. The company’s CFO Wendell Huang stated that demand for TSMC’s products outside of China remains “really strong.”
For AMD shareholders, the path forward depends on how the export situation develops. The company will need to navigate the new licensing requirements while continuing to expand its position in the competitive AI chip market.
The stock’s technical indicators suggest further volatility ahead. Traders will be watching those key support and resistance levels closely as AMD responds to these trade policy changes.
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