Although the stock of Advanced Micro Devices (NASDAQ: AMD) has been in a more-or-less steady decline after hitting the all-time high (ATH) in March this year, an American politician who is also a member of multiple relevant House committees has taken a plunge.
Specifically, Representative Michael McCaul has filed around $6.5 million worth of stock trades that include a purchase of $100,000 in AMD shares, $1 million in Apple (NASDAQ: AAPL), as well as $500,000 in Vishay Intertechnology (NYSE: VSH), per data shared by Nancy Pelosi Stock Tracker on July 25.
Furthermore, the platform following politician stock trades has also noted that he had sold $650,000 worth of Nvidia (NASDAQ: NVDA) stock and $850,000 in Oshkosh Corporation (NYSE: OSK) shares while sitting as chairman on some of the most powerful House committees.
Picks for you
Is McCaul (ab)using his position?
Indeed, McCaul is the head of committees on Foreign Affairs, Homeland Security, the Congressional High Tech Caucus, the Congressional Cyber Security Caucus, and the Congressional Artificial Intelligence (AI) Caucus and has filed the trades under his spouse and child’s names, making them legal under the new legislation until 2027.
As a reminder, the United States lawmakers passed the ‘Stop Trading on Congressional Knowledge’ (‘STOCK’) Act back in 2012 with an aim to prevent using non-public knowledge to obtain private profit and requiring US politicians to disclose their trades and holdings, but it hasn’t been very effective.
New law to curb politician stock trades
To solve this, the Senate Committee on Homeland Security and Governmental Affairs has recently approved the new version of the ‘Ending Trading and Holdings In Congressional Stocks’ (‘ETHICS’) Act to ban Congress members, their spouses, and dependents from investing in stocks and other assets.
On top of that, it would require those elected officials and their spouses and dependent children to divest from their covered assets, including securities, commodities, futures, options, trusts, and other comparable holdings beginning in 2027, and increase penalties imposed under the 2012 law.
AMD stock price analysis
Meanwhile, the price of AMD stocks at press time stood at $141.28, reflecting a 3.31% drop on the day, adding up to the 11.38% decline across the past week, while also accumulating a decrease of 10.32% in the last month, but advancing 1.94% since the year’s turn, as per data on July 26.
So, why is AMD stock dropping? Notably, this decline coincides with the bearish sentiment surrounding semiconductor stocks, triggered by political and geopolitical factors in the US, as President Joe Biden reportedly plans to impose strict controls on foreign-made products incorporating American technology.
Moreover, his administration is considering further sanctions on specific Chinese chip companies, which could potentially damage the business of US chipmakers with significant exposure to China, and Nvidia has already announced its new AI chip for the Chinese market to help circumvent potential implications.
All things considered, it seems that Representative McCaul is confident that AMD shares will recover in price in the future, and his position as chair of multiple relevant House committees might give him enough assurance to purchase $100,000 worth of them. However, doing one’s own research is critical.
Buy stocks now with eToro – trusted and advanced investment platform
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
