AMD's Earnings Preview: Options Market Bets on Continued Rally After Strong Pre-Announcement Run

Advanced Micro Devices (NASDAQ: AMD) enters its fourth-quarter earnings report on Tuesday amid heightened expectations, with options activity signaling traders anticipate a substantial move in the semiconductor stock this week.

According to data from Barchart, the derivatives market is pricing in an implied move of approximately 7.04% for AMD shares following the earnings release. This surpasses the stock's average post-earnings swing of 4.59% over its last four quarterly reports, suggesting traders foresee potentially volatile, and likely positive, price action. Should the stock move to the upper bound of that implied range, it could challenge the $267 level in the coming days.

The bullish positioning comes as AMD shares have already rallied roughly 25% from their year-to-date low, a pre-earnings run that has some analysts optimistic. "The setup into the print is constructive," noted Cantor Fitzgerald in a recent client note, reiterating its Overweight rating. The firm expects AMD to exceed Q4 consensus estimates of $1.11 per share—a figure representing year-over-year growth of over 26%—and provide strong forward guidance. Analysts there argue AMD is gaining CPU market share and is well-positioned from robust server demand, with a 12-month price target of $350.

Technical indicators also support the optimistic narrative. The stock is trading comfortably above its key moving averages, and its 14-day Relative Strength Index (RSI) sits around 60, a level that does not typically signal an overbought condition. Furthermore, seasonal trends add to the positive backdrop; historical data shows AMD has averaged a gain of nearly 5.5% during the month of February.

AMD's relative strength is partly attributed to its smoother execution compared to sector peer Intel, which recently grappled with wafer transition challenges that clouded its outlook. The broader Wall Street consensus remains favorable, with a "Moderate Buy" rating and an average price target near $286, implying over 15% upside from current levels.

Market Voices: Reactions from the Trading Floor

We gathered instant reactions from investors and analysts following the pre-earnings options data:

David Chen, Portfolio Manager at TechGrowth Capital: "The implied move is significant but justified. AMD's execution in both client and data center segments has been stellar. The guidance tomorrow will be more critical than the Q4 numbers themselves—the market wants confirmation that the AI-driven data center momentum is sustainable."

Rebecca Shaw, Independent Options Trader: "I've bought calls for a post-earnings pop. The volatility skew suggests more participants are hedging for upside than downside risk. Combined with the historical February seasonality, the risk-reward looks attractive here."

Marcus Fuller, Financial Commentator & Skeptic: "This is pure euphoria. A 25% run-up into earnings is a classic 'sell the news' setup. The options market is often a contrarian indicator at extremes, and a 7% implied move prices in perfection. Any hint of deceleration in GPU sales or competitive pressures from Nvidia will send this stock tumbling. The street is ignoring valuation at its own peril."

Linda Gibson, Semiconductor Sector Analyst at Horizon Research: "The focus will be on MI300 series GPU adoption and the data center pipeline. If management commentary validates the current demand projections, the bullish targets from firms like Cantor are achievable. AMD is in a uniquely strong competitive position it hasn't enjoyed in over a decade."

Disclaimer: This analysis incorporates data from Barchart and third-party research. It is for informational purposes only and does not constitute investment advice. The author and publishing platform hold no positions in the securities mentioned at the time of writing.