AMD Q2 Earnings Preview: Priced for Perfection or Due for a Pullback?

AMD (NASDAQ:AMD) has much to prove amid its impressive rally, with the stock already soaring nearly 50% this year. Some analysts argue that it may now be priced for perfection, while technical experts are looking for a potential double top near last October’s highs, signaling a possible reversal. Lynx Equity Strategies also issued a cautious note ahead of AMD’s upcoming earnings, warning that the approximately 80% rise over the past three months may be outpacing the company’s underlying fundamentals, according to KC Rajkumar.

Meanwhile, on Monday, Morgan Stanley (NYSE:MS), Deutsche Bank (ETR:DBKGn), and Evercore ISI all cautioned that the S&P 500 Index could face a near-term decline in the coming weeks and months. These predictions follow a vigorous rally from April’s lows that propelled the index to levels never seen before, fueling concerns about a potential correction on the horizon.

Key Highlights

• The analyst noted that AMD is capturing more market share from Intel (NASDAQ:INTC) in the PC server processor segment. Additionally, the company has been able to increase average selling prices for its high-end desktop and laptop processors, leveraging the strength of its product lineup.
• Last week, UBS increased its AMD price target to $210 from $160, optimistic about potential approvals to resell MI308 chips in China. Bank of America also raised its target to $200 from $175.3, highlighting that AMD could reach over 30% of the CPU market by 2026, up from less than 20% in 2023, particularly if Intel’s market share declines.
• AMD’s strong execution of its product roadmap has boosted customer confidence and attracted skeptical enterprise clients. Its expertise in CPUs and GPUs enables the company to provide integrated solutions for AI workloads and intensive tasks, potentially driving further adoption as organizations invest in AI infrastructure.
• AMD faces challenges in executing its AI strategy, including NVIDIA (NASDAQ:NVDA)’s lead in the AI GPU market and its established CUDA ecosystem. Delays or performance issues with AMD’s upcoming MI400 series could widen the gap with NVIDIA and hinder its ability to gain market share in the rapidly evolving AI accelerator space.

Source: InvestingPro

Source: InvestingPro

AMD Q2 2025 earnings after-market Tuesday August 5, 2025

Option Statistics

Put/Call ratio suggests the following three scenarios:

• With Put/Call ratio between 1.0214 to 0.7584 for the next two upcoming expiries suggest that the overall option traders are inclined to Calls in the short-term.
• Lower earnings & guidance could trigger a sharp sell-off as option traders would start selling their Calls.
• Better than expected earnings & guidance would trigger a short-lived rally due to stock being overly overpriced.
• Option market is showing an exceptionally large net positive Gamma at 180 strike versus a negative gamma exposure at 120 strike from August 2025 to December 2027.

Technical Analysis Perspective

• AMD stock surged around 139%, soaring from $76.48 in April 2025 to $182.50 in July 2025.
• Prices have tested the 187-185 resistance three times since April 2024 but have failed to break through, including a setback last month.
• A triple top pattern could be in the making if AMD confirms 182.50 as resistance level post earnings.
• From a technical standpoint, earnings serve as a strong catalyst for a breakout and can help determine the stock’s direction.
• A sustained and strong move above 182.50 to 187.28 could open the door for further gains, targeting the $200 level and extending the current rally.

Weekly Candlestick Chart

AMD Seasonality Chart

Since 2006, AMD has posted a July gain of 4.6% in 55% of the years, while August has seen a decline of 1.5% in 32% of the years.

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Disclaimer: This article is written for informational purposes only. It is not intended to encourage the purchase of assets in any way, nor does it constitute a solicitation, offer, recommendation or suggestion to invest. I would like to remind you that all assets are evaluated from multiple perspectives and are highly risky, so any investment decision and the associated risk belongs to the investor. We also do not provide any investment advisory services.