Advanced Micro Devices (AMD) stock is inching up ahead of the company’s Q1 financial release, scheduled to land on May 5 after market close.
Consensus is for the artificial intelligence (AI) chips specialist to post $1.06 in earnings per share (EPS), up 36% on a year-over-year basis.
AMD shares are heading into the Q1 print with a remarkable 180% gain; yet, options traders seem to believe they will rip higher in the day ahead.
Where Options Data Suggests AMD Stock is Headed
According to Barchart, the put-to-call ratio on contracts expiring May 8 sits at about 0.66x currently, signaling a bullish skew, with the upper price set at $377, indicating potential for a 7.38% rally through the end of this week.
AMD’s technicals also warrant the same. At the time of writing, the chipmaker is trading decisively above its major moving averages (MAs), with an RSI in the early 70s, suggesting intense buying pressure.
Note that AMD stock has a history of closing May with a more than 7% gain on average, a seasonal pattern that makes it even more attractive to own in the near term.
HSBC Downgrades AMD Shares Ahead of Q1 Earnings
HSBC’s senior analyst Frank Lee, however, doesn’t share the optimism of options traders on AMD shares heading into the Q1 earnings.
In his recent note to clients, Lee downgraded the chipmaker to “Neutral,” citing stretched valuation; after a meteoric run last month, the easy money has been made, and much of the near-term optimism is baked in already.
He also flagged concerns that limited foundry capacity at Taiwan Semiconductor (TSM) would persist through the end of 2026, potentially capping AMD’s ability to positively surprise the market on volume.
Plus, Advanced Micro Devices doesn’t currently pay a dividend to incentivize ownership at the current elevated valuation multiple.
What’s the Consensus Rating on Advanced Micro Devices?
Investors should note that HSBC represents somewhat of a contrarian call on AMD stock though.
According to Barchart, the consensus rating on Advanced Micro Devices remains at “Strong Buy”, with price targets going as high as $380, indicating potential upside of another 7% from here.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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