AMD Stock Price Fell Despite Positive Earnings, But Why? 

• AMD stock rallied 36.72% in three months and 75.49% YTD. 
• Despite favorable earnings, AMD stock fell 8%, and the future outlook increased the price. 

Advanced Micro Devices Inc. (NASDAQ: AMD) released Q2 earnings on August 1st, 2023, causing AMD stock to drop by 8%. Can AI chip sales make a difference? As per the report, the revenue was $5.4 Billion, operating at a loss of around $20 Million, and diluted earnings per share (EPS) of 0.02%. But the outlook for AI chip sales in coming months provides hope to investors. 

Advanced Micro Devices Inc. (AMD) Stock: Price Fell Despite Positive Earnings

AMD chair and CEO, Dr. Lisa Su backed the positive earnings saying the Ryzen 7000 and 4th Gen EPYC processors’ sales were great. Moreover, the company’s AI engagement gained over seven times. This increased engagement was because their multiple customers expanded programs supporting the future deployment of instinct accelerator at scale. 

The revenue from various AMD vertices was as follows, Data Center was at $1.3 Billion, with a year-over-year (YOY) drop of 11%. Client Revenue scored $998 Million, YoY fell 54%. Gaming Revenue came at $1.6 Billion, YoY drops 4%. At the same time, Embedded revenue was $1.5 Billion, with a YoY gain of 16%. In comparison, total revenue fell 18% YoY to $5.4 Billion. 

Advanced Micro Devices (NASDAQ: AMD): Technical Analysis & Prediction

The AMD stock at press time, is trading at $115.82, gaining 2.36%; previous close and open were at $113.15 and $114.48, respectively. The 52-week range is from $54.57 to $135.83, meaning a solid push could create new highs. With a volume of 83.08 Million shares, the market cap is $186.512 Billion. 

The trailing twelve-month (TTM) price-to-earnings (P/E) ratio is 643.44, indicative of a very high-valued stock price. At the same time, the (TTM) earnings per share (EPS) is $0.18. Analysts placed a 2.80 rating for moderate buy and estimated a price target of $135.19 with a 16.7% upside. 

AMD reported its last earnings on August 1st, 2023, where the reported revenue of $5.359 Billion exceeded the expected value of $5.319 Billion by 0.75%. Compared to the previous quarter, revenue fell by 18.18%. At the same time, the reported earnings of $0.58 surpassed the estimated value of $0.574 by 1.02%. 

Compared to the previous quarter, EPS fell by 44.76%. Maybe investors weren’t happy with the report. As a result, AMD stock price fell 8.30% around August 1, 2023. The subsequent earnings will be reported on October 31, 2023, where revenue shall be $5.707 Billion, while earnings are estimated to be $0.684. 

Analysts expect the sales for Q3 2023 to be around $5.7 Billion and attributed the weaker PC market to the drop of 54% in Q2 revenue in its client segment. Due to the reduction in Fitch Ratings, semiconductor-led tech companies need help.  

On August 3rd, 2023, NASDAQ fell 2.1%, the second worst day of 2023. SE Semiconductor Index descended by 3.5% on the same day. AMD stock price gained 75.49% YTD. When compared to rival Nvidia Corp. (NASDAQ: NVDA) at $446.80, AMD stock nearly tripled in value. 

AMD Stock Rallying Hard After Golden Crossover

When ascending 200EMA is crossed by climbing 50EMA from below, it creates a golden crossover and foreshadows a bullish trend. AMD stock price action had a golden crossover in March 2023, gaining nearly 61%. The current price is bruising the 50EMA, hinting at a slight drop. 

If the price drops, it should retrace from 200EMA or bounce off the demand zone. The north-bound 200EMA hints at a rally and a positive crossover of RSI at 53.44 supports the prediction. If AMD stock price crosses and sustains over immediate resistance, it could cross the supply zone. 

S/L – T/P Guiderails

• Resistance: $132.32 and $141.30. 
• Support: $97.60 and $81.16. 

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