Advanced Micro Devices (NASDAQ:AMD) stock has stalled in the past two months amid profit-taking and the ongoing jitters in the semiconductor industry. After peaking at $582 in June, it has slumped by 18% to the current $476, and the options market points to a double-digit move after its earnings.
AMD Stock to Have a Big Move After Earnings
Top technology companies have had large moves after publishing their earnings, and AMD may experience the same. The options market shows that the company has an implied volatility of about 75%, with the put/call option moving to 0.68. (A figure less than 1 signals that more investors have placed calls than those who have placed puts.)
The options market is also pricing in a 12% move in either direction. Such a move in the downside would bring it to $417, its lowest level in July. On the other hand, a 12% move to the upside will push it to $537.
In the last earnings report, AMD stock jumped by over 20% after management highlighted its growth in the data center industry. Before that, in February, the stock tumbled by over 15% in a single session after its earnings.
Benzinga data shows that the consensus target for the stock is $533, representing a 12% upside from the current level. Susquehanna’s Christopher Rolland and Mizuho’s Vijay Rakesh hiked their targets to $500 and $625, respectively.
AMD Has Become a Major Player in the AI Space
The upcoming earnings report is expected to demonstrate that the company has become a major player in the artificial intelligence industry. The average estimate among analysts is that its revenue jumped by 47% in the second quarter to $11.31 billion. Its EPS is expected to jump from 48 cents last year to the current $1.61.
The company’s robust growth has been driven primarily by its fast-expanding data center segment. In its latest earnings report, it posted a 38% year-over-year increase in revenue to $10.3 billion, while data center revenue climbed 57% to $5.7 billion, underscoring the strength of AI-related demand.
These results come two weeks after the company made a large investment in Anthropic, the creator of Claude. In October last year, it announced a major deal with OpenAI. OpenAI will deploy 6 gigawatts of AMD GPUs.
At the same time, its CPU business has done well amid the ongoing AI agents business. Just recently, Intel (NASDAQ:INTC) announced strong numbers, boosted by the rising demand for CPUs.
Most notably, all big-tech companies have committed to continue spending this year, with Alphabet (NASDAQ:GOOG) boosting its capex to $205 billion. Other companies, including its customers like Meta and Microsoft, also pledged to continue spending.
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