Direxion's AMUU, AMDD ETFs Facilitate Speculation In Advanced Micro Devices' Wild Ride

Author: JE Insights | October 13, 2025 10:36am

Although semiconductor giant Advanced Micro Devices Inc (NASDAQ:AMD) took the market by storm with a potentially landmark deal, the extreme enthusiasm toward artificial intelligence raises concerns about an unsustainable bubble. As such, last week saw AMD stock tumble into the red after what appeared to be an auspicious start to another stunning rally.

On balance, circumstances look very much favorable for Advanced Micro. Since the start of the year, AMD stock has gained nearly 78%. In the trailing month, the security is up over 35%. Much of the upswing centers on the company's multi-year deal with OpenAI, the maker of the popular chatbot ChatGPT. Under the terms of the agreement, the endeavor could potentially unlock $135 billion in revenue and mount a serious challenge to Nvidia Corp (NASDAQ:NVDA).

According to a Benzinga report, the deal involves deploying 6 gigawatts (GW) of Advanced Micro's graphics processing units (GPUs) to power OpenAI’s expanding data center infrastructure over the next several years. On the other end of the table, OpenAI can receive up to 160 million shares of AMD stock through performance-based warrants that vest as GPU deployments hit certain benchmarks.

Per Goldman Sachs, not only could the deal translate into a substantial revenue boost for AMD, it may also translate into a "modest incremental negative" for Nvidia. Subsequently, many traders piled into AMD stock.

Still, Wall Street analysts have been careful not to get overly excited. For one thing, Goldman cited that "significant customer concentration" with OpenAI could become a potential headwind for AMD stock. By 2027, the software specialist could account for more than 40% of Advanced Micro's revenue.

Furthermore, it would seem that skepticism has started to creep in, especially amid broader concerns of an AI valuation bubble. Heading into last weekend, AMD stock suffered a loss of almost 8%. On the prior Thursday, the security began cooling off, with Nvidia CEO Jensen Huang during the midweek session expressing surprise over AMD's partnership with OpenAI, calling the deal "imaginative" but "surprising."

Essentially, Huang's skepticism centered on the semiconductor specialist's decision to grant OpenAI a 10% stake in the company prior to the aforementioned deal being fully developed.

The Direxion ETFs: With both big rewards and massive risks at stake, Advanced Micro presents a kinetic canvas for speculators on both sides of the fence. Subsequently, financial services provider Direxion brought to the table a relevant solution: countervailing exchange-traded funds that allow investors to easily speculate on AMD stock.

Getting down to the details, the Direxion Daily AMD Bull 2X Shares (NASDAQ:AMUU) tracks 200% of the daily performance of the namesake equity. On the other end, the Direxion Daily AMD Bear 1X Shares (NASDAQ:AMDD) tracks 100% of the inverse performance.

Primarily, the main purpose behind Direxion ETFs is to facilitate a convenient mechanism for speculation. Ordinarily, those interested in leveraged or inverse positions must resort to the options market, which may feature unique complexities. In contrast, Direxion funds are debit-based transactions where the maximum money that can be lost is whatever is put in.

Still, prospective participants must be aware of the very real potential of losing capital. For one thing, leveraged and inverse funds tend to be more volatile and unpredictable compared to standard funds tracking benchmark indices like the Nasdaq Composite. Second, Direxion ETFs are designed for exposure lasting no longer than one trading session. Holding beyond this recommended period may expose traders to positional decay due to the daily compounding effect.

The AMUU ETF: While the AMUU ETF suffered a huge blow on Friday amid heightened trade tensions with China, the overall performance has been stout, with the fund gaining roughly 168% year-to-date.

• What's intriguing about AMUU was that the price action soared above the 20-day exponential moving average and the 50 DMA, which previously acted as a consolidation channel.
• Accumulative volume in October has picked up noticeably, which the bulls may find encouraging. However, there's also the possibility of a gap-down event forcing a reversion to the mean.

The AMDD ETF: Though the AMDD ETF enjoyed a strong 8% move on Friday, the overall narrative has been negative, with the inverse fund losing about 60% of value year-to-date.

• Prior to recent volatility, both the 20-day EMA and 50 DMA represented support, so dropping below these levels is technically problematic.
• However, it also appears that accumulative volume has picked up substantially relative to prior months, indicating possible interest in the inverse position.

Featured image by Pete Linforth on Pixabay.

Posted In: AMD AMDD AMUU NVDA