Trading AMD After Q3 Performance

November 02, 2023 21:13

Chip stocks have received a lot of attention this year due to an increase in demand from the AI industry. Will the new source of revenue boost corporate profits or is it still too early to determine? Learn more about AMD's latest earnings report, third-quarter performance and what the analysts are forecasting for the stock.

Stock: Advanced Micro Devices Inc
Symbol for Invest.MT5 Account: AMD
Date of Idea: 1 November 2023
Time Line: 1 - 6 months
Entry Level: $100.00
Target Level: $155.00
Position Size for Invest.MT5 Account: Max 5%
Risk: High
  • The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.

All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose, as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.

AMD Fiscal Q3 2023 Performance

Here are some of the key highlights from the latest fiscal third-quarter earnings report from AMD: 

  • Earnings per share of 70 cents vs 68 cents expected 
  • Revenue of $5.8 billion vs $5.7 billion expected 
  • Revenue increase of 4% compared to a year earlier 
  • Gaming sector revenue down 8% 
  • Embedded sector revenues down 5% 
  • Client segment (personal computing) revenue up 42% 
  • Expected fourth-quarter sales of $6.1 billion vs $6.37 billion expected 
  • Data centre GPU revenue forecast of $2 billion in 2024 

AMD beat analyst expectations on both earnings per share and revenue. However, on the earnings call the stock dipped on the weaker-than-expected forecast for its fourth-quarter sales. AMD forecasts $6.1 billion worth of sales while the market was expecting $6.37 billion but no reasons were given for the lower forecast. Revenue was lower in most sectors but a standout performance in the client segment division helped to boost overall figures.

While the mixed report initially sent the stock lower, the price recovered after AMD announced its forecast for its new MI300 series of chips which is set to challenge Nvidia's dominance in the AI sector. AMD believes sales could exceed $2 billion in 2024 from this chip alone. AMD's chips are used to train and deploy generative artificial intelligence models.

The higher sales forecasts for its series of AI chips are due to the fact they are now ready to produce the chip at volume and AMD already has purchase commitments lined up - although we don't know how much of the $2 billion forecast is actual commitments. The mixed report led some analysts to lower their price target for AMD's stock price.

It's important to take into consideration that keywords such as AI tend to create more hype around stock and can lead its share price to levels that are not in line with company fundamentals. Some analysts lowered their stock price forecasts to take into consideration the lower revenue figures in its gaming and embedded divisions - a worrying trend if it does continue.

AMD Stock Forecast - What do the Analysts Say?

According to analysts polled by TipRanks for an AMD stock forecast in the past 3 months, there are currently 22 buy, 7 hold and 0 sell ratings on the stock. The highest price level for an AMD stock forecast is $155.00 with the lowest price target at $95.00.

The average price target for an AMD stock forecast is $131.29.

Source: TipRanks, 1 November 2023


An Example Trading Idea for the AMD Stock Price

  • An example trading idea for the AMD share price could be as follows:  
  • Buy the stock on a pull back to the post-earnings high at $100.00 to allow for volatility. 
  • Target just below the highest analyst price target of $155.00. 
  • Keep your risk small at a maximum of 5% of your total account.   
  • Time Line = 1 – 6 months  
  • If you buy 10 AMD shares:  
    • If target is reached = $550.00 potential profit [($155.00 - $100.00) * 10 shares].

Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering the higher level of volatility in AI-related stocks.

Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.

With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in AMD stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.

There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!

How to Buy AMD Stock in 4 Steps  

With Admirals, you can buy shares in companies like AMD with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks. 

  1. Open an account with Admirals to access the dashboard.   
  2. Click on Trade on one of your live or demo accounts to open the web platform.   
  3. Search for your stock in the search window at the top right to view the live price chart. 
  4. Click Create New Order from the bottom of the screen to open the trading ticket. 
Source: Admirals MetaTrader 5. AMD. Monthly. Date: Jan 2016 to Nov 2023, captured on 1 Nov 2023. Past performance is not a reliable indicator of future results or future performance.


Click on the banner below to trade AMD stock today! ▼▼▼ 

Do You See the AMD Stock Price Moving Differently?   

Remember that all analytics and trading ideas are based on the personal view and experience of the author.

If you believe there is a higher chance AMD share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.

The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.

This means you can trade long and short to potentially profit from rising and falling stock prices.


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Jitanchandra Solanki
Jitanchandra Solanki Financial Markets Author, Admirals London

Jitanchandra is a financial markets author with more than 15 years experience trading currencies, indices and US equities. He is an accredited Market Technician with a BA Hons degree.