Shares of Advanced Micro Devices Inc (NASDAQ: AMD) and Intel Corp (NASDAQ: INTC) experienced a downturn on Monday following China’s announcement of new guidelines aimed at phasing out foreign microprocessors, including those from AMD and Intel, in government PCs and servers.
The move is part of China’s broader initiative to reduce reliance on foreign technology and promote domestically-produced solutions. According to reports from the Financial Times, China has introduced guidelines mandating government agencies above the township level to procure “safe and reliable” processors and operating systems, thereby sidelining foreign microprocessors.
In addition to AMD and Intel, China’s new guidelines also target Microsoft’s Windows operating system and other foreign database software, signaling a broader effort to bolster its domestic technology sector.
The significance of China’s decision is underscored by the substantial contribution of the Chinese market to both Intel and AMD’s revenues. China accounted for 27% of Intel’s sales in 2023, making it the company’s largest market. Similarly, China represented 15% of AMD’s sales during the same period.
The announcement reflects China’s ongoing efforts to assert greater control over its technological ecosystem and reduce dependence on foreign suppliers, aligning with its broader strategic objectives in the technology sector.
Should I Sell My AMD Or INTC Stock?
Deciding whether to sell or hold a stock hinges largely on an investor’s individual strategy and risk tolerance. For swing traders, realizing gains by selling an outperforming stock may be preferable, whereas long-term investors might opt to weather short-term fluctuations in anticipation of further share price appreciation.
Similarly, traders aiming to limit losses might opt to sell a stock that experiences a predetermined decline, while investors with a longer-term horizon may view such declines as opportunities to acquire more shares at discounted prices.
Currently, shares of Advanced Micro Devices (AMD) have surged by 79.8% year-to-date, outpacing its historical average annual return of 33.08%. On the other hand, Intel’s (INTC) shares have gained 40.75% year-to-date, contrasting with its average annual return of -9.27%. Analyzing a stock’s current movement in comparison to its historical performance can provide valuable insights into whether the movement is typical or presents a potential trading opportunity.
Additionally, investors may factor in market dynamics such as the Relative Strength Index (RSI), which indicates whether a stock is overbought or oversold. Presently, AMD stock boasts an RSI of 22.79, signaling oversold conditions, while Intel stock has an RSI of 30.11, suggesting neutral conditions. These indicators can assist investors in making informed decisions about whether to sell, hold, or accumulate more shares based on prevailing market conditions and individual investment objectives.