What Investors Should Know About Advanced Micro Devices
What Investors Should Know About Advanced Micro Devices
AMD is scheduled to report earnings Tuesday—can the stock prevail after Intel’s plunge?
AMD is scheduled to report earnings on Tuesday, April 30.
Earnings per share of $0.62 and revenue of $5.48 billion are expected.
Options are loaded with premium amid high implied volatility rank.
Investors look to AMD after Intel outlook drags the chip sector
Advanced Micro Devices (AMD) is scheduled to report earnings on Tuesday, April 30. The chipmaker is expected to report earnings per share (EPS) of $0.62 for the January to March quarter, which would be a decrease from last quarter’s $0.77 EPS. However, it would top last year’s Q1 EPS of $0.60.
Revenue is expected to come across the wires at $5.48 billion. That would be down from last quarter’s $6.17 billion but up from the same period last year when AMD posted revenue of $5.35 billion. Comparing earnings to the same period from the prior year offers a better snapshot of performance because chip sales are influenced—like many consumer products—by seasonality.
AMD’s rival Intel (INTC) dropped nearly 10% today after reporting a disappointing revenue outlook. Markets contained the selling to INTC, with AMD rallying over 2%. That suggests INTC’s problems are specific to itself and not to the broader industry. In fact, Intel faces problems that may provide anopening for AMD. Intel is undergoing a transformational phase, which creates drag on the company’s effectiveness to concentrate its energy on sales and innovation.
While soft guidance will remain the potential headwind for a negative earnings reaction, investors will dig into other areas to assess AMD’s longer-term prospects. Specifically, investors want to see how its sales of graphic processing units (GPUs) are doing as it attempts to capture market share from Nvidia (NVDA). Still, broader chip sector woes remain largely in place.
Analysts remain largely bullish on the stock, with 31 of them assigning a strong buy rating, eight giving it a buy rating, nine choosing a hold rating and only one providing a sell rating, according to TradingView data. Among 41 analysts who offer price targets, the average one-year target is 201.63, which represents a 28% gain from Friday’s price of 157.41.
Trading AMD earnings
AMD hit an all-time high of 227.30 back in March, but the stock has dropped 30% since then. For reference, INTC is down just slightly more over the same time frame, and SMH—the VanEck Semiconductor exchange-traded fund (ETF) is down about 9%.
The stock is trading with an implied volatility rank (IVR) of 74.8. That is juicing up its options prices with a considerable amount of premium. That said, those looking to sell premium against earnings have their pick of choices, whether going long, short or neutral.
The May 3 strike shows an implied move of +/- 12.49 points. An example trade going on the neutral to bearish side is exampled by a short call vertical at the 30 delta, selling the 167.5 call and buying the 170 call. That trade would give a hypothetical max profit of $62 and max loss of $186, with a probability of profit of 74%.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.
Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.
tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.
tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.
tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.
tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.
© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved. Applicable portions of the Terms of Use on tastylive.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.