Advanced Micro Devices Inc. (AMD) shares jumped nearly 4% in Friday's premarket session, as investors piled back into semiconductor stocks ahead of next week's earnings. The move came as Nasdaq futures gained 0.82% and S&P 500 futures rose 0.17%, reflecting a broader risk-on tone in the market.
The chip sector got a boost Thursday after strong quarterly results from Microsoft Corporation (MSFT) and Lam Research Corporation (LRCX) sparked a broad buying spree, lifting several beaten-down semiconductor names. AMD rode that wave, with shares up 3.56% at $502.67 in premarket trading.
Earnings In Focus
AMD is scheduled to report second-quarter results on Aug. 4, and with earnings just days away, traders are positioning for what could be a volatile move following the report. Wall Street expects earnings of $1.55 per share, up from 48 cents a year earlier, on revenue of $11.28 billion, compared with $7.68 billion last year.
Those numbers reflect the company's continued momentum in the data center and AI markets, but they also set a high bar. The stock's valuation suggests investors are already pricing in significant growth, leaving little room for disappointment.
Technical Analysis
AMD remains in a strong long-term uptrend, with the stock up 175.3% over the past 12 months. The shares trade 26.3% above their 100-day simple moving average of $397.37 and 61.7% above their 200-day simple moving average of $310.52, signaling a positive long-term trend.
However, the stock is consolidating in the short term. It sits 2.9% below its 20-day simple moving average of $517.14 and 1.8% below its 50-day simple moving average of $510.97. The relative strength index stands at 46.72, indicating neutral momentum with room for the stock to move in either direction.
Key technical levels include resistance at $546.50 and support at $498.00. A break above resistance could signal a continuation of the uptrend, while a drop below support might suggest further consolidation.
Analyst Outlook
AMD trades at a price-to-earnings ratio of 161.8, reflecting high expectations for future growth. The stock carries a Buy consensus rating with an average analyst price forecast of $581.86. Recent analyst actions include:
- Susquehanna maintained a Positive rating and raised its price forecast to $500 on July 30.
- Mizuho reiterated Outperform and increased its price forecast to $625 on July 27.
- Wedbush maintained Outperform and lifted its price forecast to $600 on July 27.
These price targets suggest analysts see further upside, but the wide range between $500 and $625 highlights the uncertainty heading into earnings.
MarketDash Edge Rankings
MarketDash Edge scores AMD highly for Momentum (98.02), Growth (97.04) and Quality (92.94), while assigning a low Value score of 3.71 because of its premium valuation.
That combination suggests investors continue to reward AMD's AI-driven growth story. However, the elevated valuation could leave little room for disappointment when earnings are released. If the company misses expectations or offers cautious guidance, the stock could see a sharp pullback.
ETF Exposure
AMD is a major holding in several semiconductor-focused exchange-traded funds, including the iShares Semiconductor ETF (SOXX) with an 8.47% weighting, the ARK Next Generation Internet ETF (ARKW) at 8.31%, and the Pacer Data and Digital Revolution ETF (TRFK) at 8.22%. Investors with exposure to these funds may see outsized moves in their portfolios based on AMD's earnings.
Price Action
Advanced Micro Devices shares were up 3.56% at $502.67 during premarket trading on Friday, according to market data. The stock has been on a tear over the past year, but the upcoming earnings report will be a key test of whether the momentum can continue.
