AMD Earnings on Deck as Market Rally Continues
AMD Earnings on Deck as Market Rally Continues
Will weak data center sales offset gaming gains after a rough 2025 start?
- Advanced Micro Devices is set to report earnings after the market close on Tuesday.
- Analysts expect earnings per share to cross the wires at $0.94 on $7.12 billion in revenue.
- The options market shows an expected move of +/- 8.15 points for AMD, or 8.32% of today’s 99.03 stock price.
Advanced Micro Devices (AMD) is scheduled to report first-quarter fiscal results on Tuesday, May 6, after the market close.
AMD hasn’t had the best year; the stock price is down about 18% since Jan. 1. That’s nearly double the decline seen in the VanEck Semiconductor ETF (SMH), and below the S&P 500’s loss of 3.8% year-to-date. But a recent recovery in market sentiment has allowed AMD to rise 15% over the last two weeks.
Last quarter, AMD beat its earnings estimates, but the stock price fell because of a miss on its data-center segment, highlighting its weakness in a focal part of the market for investors amid the boom in artificial intelligence.
Data center sales are expected to remain on the weak side, following headwinds from U.S. measures to limit sales of graphic processing units (GPUs) to China. Those restrictions will likely add to a market that has become less competitive over the past year, as customers cut spending plans for artificial intelligence (AI) data centers.
Meanwhile, AMD sales have been strong in Japan, with customers pushing high demand for the Ryzen 7 7800X3D chip, which is aimed at gamers and comes highly recommended in internet forums such as Reddit (RDDT).
What analysts expect from AMD
According to TradingView, analysts expect AMD to report earnings per share (EPS) of $0.94 on $7.12 billion in revenue. That would compare to a year ago when AMD posted an EPS of $0.62 on $5.47 billion in revenue.
AMD has a solid track record of beating estimates, exceeding EPS and revenue expectations in three of the last four quarters. Last quarter, AMD reported EPS of $1.09 on $7.66 billion in revenue.
While several analysts have downgraded their price targets for AMD this year, there is still a bullish consensus on the stock price. The average one-year price target stood at 136.35 per share, which represents a 38% increase from Friday’s stock price of 99.03.
Trading AMD earnings
AMD traded today with an implied volatility rank (IVR) of 35.3. That means volatility is somewhat subdued compared to the last twelve months of trading. The May 9 options expiration for AMD stock shows an expected move of +/- 8.15 points, or 8.32% of the current stock price. That is on the higher end of the range for earnings moves from S&P 500 companies.
AMD’s technical posture has improved recently amid the broader market rally that has been given a boost by a beat from Amazon (AMZN). Prices have settled above the 9- and 21-day exponential moving averages, along with a crossover in the 9-day EMA above the 21-day EMA. Moreover, prices are now attempting to close above the 50-day simple moving average (SMA). Short term momentum now seems to be skewed to the upside.
Given that decent volatility is priced into the options structure over the short term, traders who are long biased may want to approach the trade by selling a put spread. Conversely, a short call spread could offer a trade for those expecting a negative reaction to earnings.
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Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. #@fxwestwater
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