AMD Stock Crash Is A Golden Money Making Opportunity
AMD’s 17% crash on Wednesday signals a sentiment reset, not a broken story. Soft guidance overshadowed a Q4 beat, triggering a massive exit. But with the core business holding up, this aggressive sell-off appears to be an opportunity disguised as a crisis (read AMD Stock (-17%): AI Guidance Disappoints, Triggering Profit-Taking).
Are we talking about buying AMD stock right now? No. There is a smarter trade available if you really believe in AMD’s long-term story.
With this crash, the option prices have spiked, and that’s where the opportunity lies. If you’d love to buy AMD at a 50% discount at about $100 per share and have some cash ready to go, here is a trade.
You could earn 8.2% annualized yield at 50% margin of safety by selling Put Options.
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- Sell a long-dated Put option expiring 1/15/2027, with a strike price of $100
- Collect roughly $415 in premium per contract (each contract represents 100 shares)
- That’s about 4.2% annualized yield on the $10,000 you’re setting aside for the possibility of buying the stock
- This cash parked in a savings or money market account will earn an extra 4.0%, taking the total yield to 8.2%
- And you give yourself a chance to buy AMD stock at a deeply discounted price of $100
That’s it. That’s how you earn high income while you wait for the current bearish market sentiment to settle down and get AMD stock at even more attractive prices.
This might be a smart opportunistic trade, but it is not the only strategy available. We take it a step further with the Trefis High Quality Portfolio, which is a sophisticated framework designed to protect your wealth while giving upside exposure.
AMD Options Trade Outcomes: You Win Either Way
| Stock Price Outcome | What It Means For You |
|---|---|
| AMD stays above $100 | You keep the full $415 premium, resulting in “4.2% extra income” over the next 344 days on cash that might otherwise earn you 4.0% or less. You never buy the stock and simply walk away with the cash. |
| AMD closes below $100 | You’ll be obligated to buy 100 shares at $100. But thanks to the $415 premium, your effective cost basis is just $95.85 per share, a roughly 52% discount from the current level. |
But to hold this trade with conviction, you want to see long-term upside in the stock. Because if it comes to it, you want to be excited about buying the stock cheaply.
First, you want to check out the fundamentals. For details, see Buy or Sell AMD Stock or check Advanced Micro Devices Investment Highlights
Second, you want to better understand competitive advantage and industry tailwinds. Below is what specifically gives us the conviction.
Why Hold AMD Stock Long-Term
Here is the core thesis.
Hyperscalers have a strategic need for a viable second source to Nvidia. AMD fills that gap, and this will drive strong MI300 adoption, focusing on TCO (total cost of ownership) advantages and supply chain diversification.
AMD captures value by winning ‘design wins’ with major cloud providers (e.g., Microsoft, Oracle) who are building out their AI infrastructure. Revenue is generated per unit sold, and the shift in sales mix toward these high-margin Data Center products is highly accretive to overall company profitability.
Sure, the stock may be volatile right now, but consider the long-term tailwinds.
Management has guided for the Data Center segment revenue to grow by more than 60% annually over the next 3 to 5 years, and AMD has secured major public wins for its MI300X AI accelerators from top-tier cloud providers, including Microsoft Azure and Oracle Cloud, validating its position. The AI accelerator market is projected to grow from approximately $44 billion in 2026 to over $300 billion by 2034.
While AI growth may be core to AMD thesis, do not forget the inroads AMD is making against its traditional competitor, Intel. AMD has consistently gained CPU market share in both the consumer and data center segments over the last 3-5 years.
See Advanced Micro Devices Full Analysis.
Not comfortable with options or stock-specific trades? Portfolios can protect and grow your wealth even better.
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