$AMD · Schwab Network · 2026-11-04

AMD's stock price rose after a solid earnings report last night. AMD is the main focus of this morning's trading due to this earnings report. So, there is a pretty good response.

it was clear in the initial market reaction that investors were willing to overlook some of the shortfall because they did well in the areas that mattered most. I mean, they did better than expected in terms of revenue and profit and they succeeded where they needed to be focused.

Data center revenue increased 97 percent year-on-year. This was a very important metric here. However, in some specific cases they could not meet the targets. However, EPS was not among them. They exceeded expectations with $2.09.

Total revenue was $13.38 billion. This is also a good result and an improvement over last year. Their data center division reported revenue of $8.5 billion, sorry, which is much higher than the forecast of $8.2 billion , which is almost double what it was a year ago.

And CEO Lisa Su says AMD is capable of meeting the growing demand for AI chips. So, it's a slightly different story than other companies who are saying they ca n't meet demand.

He says they can. They will meet the demand. They will find a way.

He said on the call that he expects server revenue to double year-on-year in 2027. Data center AI growth will be faster than the company estimated 90 days ago. The company expects data centers to drive the bulk of their revenue and earnings growth.

Their client business revenue, which includes PC sales, reached $2.9 billion. This was an area of failure to achieve the target. Wall Street expected more than $3 billion here.

However, their PC business is not as vulnerable as Intel's. This is only about a quarter of AMD's business and it is heavily skewed towards AI data center revenue and therefore becoming a smaller part of their business.

So, they didn't see such a significant decline because of the PC market, but they were a little behind in that measure. But, as you point out, the market is forgiving of this because they have succeeded where it matters. We are about 2% up.

And in the fourth quarter , they're saying they expect to generate about $17 billion in revenue. This was about a billion dollars more than the average estimate. And their gross margin for this quarter is expected to be around 55%, which is very much in line with market expectations.

Analysts, including Goldman Sachs, are maintaining their buy rating. They have a price target of $700. For reference, we are now at $492 , even with this upward trend.

The company said it expects the stock price to rise further following strong results and guidance.

And investor expectations were significantly lowered due to Intel. However, the key things they felt were the strength of the data center, better-than-expected gross margin results, and their in-line OPEX outlook.

BOFA lowered their price target from 720 to 650, but it still suggests a fair bit of upside. They maintained their buy rating. They said that AMD, according to the quote, met every condition we expected before the earnings call.

And they have increased their EPS estimates by 4% for calendar years 27 and 28. However, they have lowered that price target to reflect the recent contraction in the sector's multiples.

Wells Fargo also lowered their target from 700 to 650, but they maintained an overweight rating. Once again, there are indications of significant upside here.

UBS lowered their target by about $30 to $700. They also maintained a buy rating. Therefore, there is widespread bullish sentiment and bullish reaction towards AMD.

Sam, we were looking for the tech company that would change the game for these chipmakers and the big names in the AI trade , and AMD seems to be doing that today.

Yes, AMD is probably changing its own situation , not everyone's. But this is not a tide that lifts all boats.

We'll have to wait and see, but yeah, that's definitely a bright side. Today is quite an interesting day, but I think it's an AMD story, as the rest of the semiconductor stocks are down.

Yes, I think there were a lot of negative expectations about AMD based on Intel's report , especially on the key issues related to data center revenue and building out its infrastructure.

We've certainly seen AMD lean heavily into building data center and AI infrastructure , and those numbers were very strong. They even surprised Wall Street on some indicators and most importantly, we saw many price targets upgraded today.

So in my opinion, this is a stock that can withstand this selling pressure or the negative impact that spreads to the AI sector even if the market falls. We are seeing this morning that AMD is in a relatively good position.

So in the short term, I see upside potential. I am looking at a bullish strategy with a short put spread at 470 and a long put spread at 460 for the November 13th contract. I'm expecting $4 or more in credit.

It is now trading slightly lower as it has rebounded slightly from its lowest level. I don't want to take too many risks. We are aiming for 75 percent profit with only 50 percent risk.

I am sure that it is possible to achieve this within this time.

And again, if the market stabilizes and we see the market rebound from its lowest point, AMD could play a dynamic role in leading the AI sector , where companies like Nvidia are usually ahead.

Okay, I understand. It's a good day for AMD shares. It is currently trading up 1.7 percent.