To The Moon

AMD Is Up 100%+ Over 12 Months. What Its Chart Says Ahead of Earnings

High-end chip designer  $Advanced Micro Devices(AMD)$   has risen more than 100% over the past year, outpacing the S&P 500 and setting an all-time high in October. Let's see what its chart and fundamental analysis say heading into this week's Q4 earnings report.

AMD's Fundamental Analysis

AMD will release results after the closing bell on Tuesday, with analysts expecting the firm to post $1.32 in adjusted earnings per share on roughly $9.7 billion of revenue.

That would represent 21.1% gain from the year-ago period's $1.09 of adjusted EPS, as well as better than 26% year-over-year growth from Q4 2024's approximately $7.7 billion in revenue.

But very interestingly, Wall Street doesn't seem especially certain about what they expect AMD to report.

Eighteen of the 37 sell-side analysts that I'm tracking who cover AMD have revised their earnings estimates to the upside since the quarter began, while 16 analysts have cut their forecasts. Just three have left their estimates unchanged.

AMD's Technical Analysis

So, what does AMD's chart say going into earnings? Let's have a look going back about four months and running through Tuesday afternoon (Jan. 27):

This chart shows AMD's Oct. 29 $267.08 all-time intraday high at left, and some readers might see a potential double-top pattern of bearish reversal above.

They wouldn't be wrong -- at least not yet. But what I think I see is a cup-with-handle pattern with a $267 apparent pivot. This is usually understood as a bullish set-up.

AMD has already taken back its 21-day Exponential Moving Average (or "EMA," marked with green line). It's also reclaimed its 50-day Simple Moving Average (or "SMA," denoted by a blue line). All of that tends to get swing traders and institutional investors on the same page in favor of a stock.

Now let's look at those two averages' relative positions.

The green line has recently crossed over the blue line, as the blue line was pivoting from trending lower to trending higher. This is referred to as a "mini golden cross" or "swing traders' golden cross." That's a medium-term bullish technical signal.

Also note that AMD's Relative Strength Index (or "RSI," denoted by the gray line at the chart's top) has been running strong, but just below technically overbought levels.

Meanwhile, the stock's daily Moving Average Convergence Divergence indicator (or "MACD," marked with black and gold lines and blue bars at the chart's bottom) is postured very bullishly.

For one thing, the histogram of the 9-day EMA (the blue bars) is now well above the zero-bound.

Additionally, the 12-day EMA (the black line) is running above the 26-day EMA (the gold line), with both lines above zero. That's all bullish as well.

An Options Option

Some options traders who are bullish on AMD heading into earnings but don't want to plunk down the capital for an equity stake could likely utilize a bull-call spread in this scenario. That's where you go long one call and short another at a higher strike price, but where both have the same expiration date.

Here's an example:

-- Long one AMD call with a Feb. 6 expiration (i.e., after this week's earnings report) and a $252.50 strike price. This cost about $11.75 at recent prices.

-- Short one AMD Feb. 6 call with a $267.50 strike price (i.e., close to the chart's apparent pivot). This would bring in roughly $6.15.

Net Debit: $5.60.

The trader in this example is laying out a $5.60 net debit (the maximum theoretical risk involved) to try to bring back $15.

If successful, the trade will bring in a $9.40 maximum profit at expiration ($15 minus the $5.60 net debit). This will happen if AMD closes above $267.50 at expiration.

If unsuccessful, the trade will incur a maximum theoretical loss of the $5.60 net debit. This will occur if AMD is trading at or below $252.50 at expiration.

Disclaimer: The information provided is NOT financial advice. I am not a financial adviser, accountant or the like. This information is purely from my own due diligence and an expression of my thoughts, my opinions based on my personal experiences, and the way I transact.

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