Earnings announcements have brought out more than their share of movers and shakers this season, but Advanced Micro Devices (NASDAQ:AMD) hasn’t been among that unstable crop. The better news is the aftermath offers a clear advantage to today’s AMD stock investors both off and on the price chart.
There’d be little disagreement if I said it’s been an earnings season filled with cheers and jeers. Stocks have exploded higher and imploded lower following more than a few quarterly reports. IPO Beyond Meat (NASDAQ:BYND) and one-time growth favorite Grubhub (NYSE:GRUB) are two recent champions for bearish investors. Closer to home Texas Instruments (NASDAQ:TXN) took a sizable tumble. Meanwhile, other semiconductor bulls were caught reveling after reports from Intel (NASDAQ:INTC) and Lam Research (NASDAQ:LRCX). But not AMD stock.
Shares of Advanced Micro Devices finished up a scant 0.3%. For a name known for its earnings-related volatility the event proved to be a snooze fest. So what gives? For once did Wall Street presciently price in AMD’s earnings?
The Earnings Report
AMD stock’s winning ways allowed the company to delivery earnings of 18 cents per share on revenues of $1.8 billion. Advanced Micro Device’s sales grew by 9% from the year-ago period and were the highest in more than a decade. At the same time, gross margins rose to 43% — the best since 2012. Impressive, right?
What Wall Street did manage to price in correctly were AMD’s top and bottom lines. Also, slightly light guidance was likely responsible for holding back investors’ animal spirits. But for an AMD stock which has under-promised and over-delivered in the past, Wall Street’s reaction looks like a gift.
AMD Stock Monthly Chart
During intra-day trading on Thursday, the AMD stock price suddenly found a bit of the aforementioned animal spirits. From modest losses in the early going, Advanced Micro Devices stock is now up a bit more than 2.6%. But if you’re thinking you’ve missed the boat, it’s time to shake off the day-trading mentality and appreciate a very bullish and well-positioned monthly chart.
Shares of AMD have been consolidating in a high double-bottom basing pattern for the past few months. The formation found support off prior angular resistance dating all the way back to Advanced Micro’s all-time high in 2000. To say the least, it’s good news. But that’s not all AMD stock investors have going for them either.
Also supportive of the bull case for the AMD stock price, the monthly chart consolidation has developed around the lifetime 62% retracement level. As the current pattern high is firmly above the well-watched Fibonacci level, the evidence supporting a breakout to fresh relative highs grows more solid. And without being too optimistic, given AMD stock’s ever-impressive and rising business fortunes, shares could conceivably tackle fresh all-time highs above $48.50 in 2020.
Investment accounts under Christopher Tyler’s management currently own positions in Advanced Micro Devices (AMD) and its derivatives, but no other securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.
