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Earnings and Options Strategy | AMD has surged over 50% since early April. Is this a sign of better-than-expected earnings or a market trap?

$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth.
$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations.
I. Challenges and Key Focus Areas: What to look for in this earnings report?
Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD:
Sustainability of data center business growth
The data center segment is currently AMD's absolute core division. Last quarter, this business generated a record revenue of $5.4 billion (a year-over-year increase of 39%). The company has set an ambitious goal of achieving an annual growth rate of over 60% in the data center sector in the next three to five years. Investors will focus on the production progress of specific products—when will the new MI450 chip and Helios rack system enter mass production? If management continues to provide only vague progress updates, it may trigger market adjustments to high expectations in advance.
Bridging the revenue gap in the Chinese market (uncertainty factor)
In the previous quarter, AMD generated approximately $390 million in revenue from the Chinese market, primarily due to a one-time release of previously frozen MI308 chip inventory affected by export controls, rather than sustainable, regular sales. According to guidance, regular revenue from the China region this quarter is expected to significantly decline.
Q2 Earnings Guidance
The revenue forecast for the second quarter is often more decisive than the actual performance of the first quarter. If AMD’s Q2 revenue guidance exceeds estimates, it would validate the market's optimistic expectation of “continued explosive demand for artificial intelligence computing power.” Conversely, as a reference for below-expectation guidance, AMD shares dropped as much as 8% after-hours following the last earnings release precisely because the guidance fell short of expectations.
II. Options Trading Strategies to Manage High Volatility During Earnings Season
$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
Earnings releases are often accompanied by significant price fluctuations. Based on the latest market data as of April 29, the implied volatility (IV) of AMD options reached 68.38%.At a historically high level, surpassing 91% of the levels seen in the past year.This means the cost of buying options is currently extremely high. After the uncertainty surrounding earnings dissipates, this high premium typically diminishes rapidly.The current Put/Call Ratio in the market is 0.8, indicating a slightly bullish overall market sentiment with limited concern over a sharp downturn.
Based on current market expectations and AMD's fundamentals, investors can refer to different option strategies:
Covered Call Strategy
Suitable for:Investors holding AMD stock can sell call options with a strike price higher than the current share price to protect their positions while owning the underlying shares.
$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
(The design images displayed on screen are for illustrative purposes only and do not constitute any investment advice or guarantees; market conditions fluctuate frequently, and the option prices shown do not represent real-world values.)
Bull Call Spread Strategy
Suitable for:Investors who are bullish on AMD's earnings, seeking to capture gains while controlling downside risks and volatility premium exposure.
$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
(The design images displayed on screen are for illustrative purposes only and do not constitute any investment advice or guarantees; market conditions fluctuate frequently, and the option prices shown do not represent real-world values.)
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$Advanced Micro Devices (AMD.US)$The company will officially announce its Q1 2026 earnings report after the US stock market closes on Tuesday, May 5. AMD's total revenue for the first quarter is expected to be approximately 9.89 billion US dollars, with a year-on-year increase of about 33%; net profit is projected at 1.19 billion US dollars, reflecting a 67.9% year-on-year growth. Since early April, AMD has delivered an epic surge in share price driven by multiple favorable factors: 'easing geopolitical conflicts,' 'AI continuing to significantly boost CPU computing power consumption,' and 'Intel's strong earnings leading to a price hike for CPUs, which raised market expectations for AMD.' This rally even pushed AMD's stock above the $350 mark. However, fellow investors familiar with the market should know thata rise in share price ahead of earnings reports, or pricing in advance, isn't necessarily a good thing. The key lies in whether the earnings are solid enough and whether Q2 guidance can exceed expectations. I. Challenges and Key Focus Areas: What to look for in this earnings report? Although overall financial data is expected to remain stable, what truly dictates the stock price movement post-earnings announcement are the actual developments in the following three critical business areas for AMD: Sustainability of data center business growth Data centers represent AMD's absolute core segment at present. Last quarter, this business achieved a record income of 5.4 billion US dollars (up 39% year-on-year). The company has set an ambitious target of achieving an annual growth rate exceeding 60% in the data center sector over the next three to five years. Investors' focus will be on the mass production of specific products...
Disclaimer
This content does not constitute any offer, solicitation, recommendation, opinion, or guarantee for any securities, financial products, or instruments. The risk of loss in trading options can be substantial. In some cases, your losses may exceed the initial margin amount deposited. Even if you have set contingent orders, such as 'stop-loss' or 'limit' orders, they may not necessarily prevent losses. Market conditions may render these orders unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the specified time, your open positions may be liquidated. However, you will still be responsible for any deficit balance in your account. Therefore, before trading, you should study and understand options and carefully consider whether such trading is suitable for you based on your financial situation and investment objectives. If you trade options, you should be familiar with the procedures upon exercising options and at expiration, as well as your rights and obligations when exercising options and at expiration.
Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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