Intel Corporation (NASDAQ:INTC) may already be at a disadvantage when the company strolls into the earnings confessional Thursday afternoon. That’s because rival Advanced Micro Devices (NASDAQ:AMD) releases its own quarterly report tonight. INTC stock is still facing a fair amount of downside risk, especially if AMD’s market share gains begin to accelerate.

Analysts predict Intel is losing market share to AMD in the datacenter and cloud markets, but there have been rumors that AMD is also gaining ground in Intel’s mainstay desktop and laptop markets.

Granted, desktop and laptop PC sales have been sluggish for many years, so the actual monetary impact will be minimal. But the sentiment impact of a key rival taking market share in your home turf could have significant long-term consequences.

That said, Wall Street is still predicting significant overall growth for INTC earnings. Specifically, the consensus is anticipating a second-quarter profit of 96 cents per share — up 33% year-over-year. Revenue, meanwhile, is expected to rise 13.6% to $16.76 billion.

But expectations may be even higher. For instance, Earnings Whispers puts the second-quarter whisper number at $1 per share. Topping this figure amid talk of market share losses to AMD could tip the scales in favor of INTC stock.

There is also room for potential upgrades and/or price target increases. Sentiment has deteriorated on INTC stock during the past month. Now, roughly 18 of the 41 analysts following INTC stock rate the shares a “hold” or worse. The 12-month consensus price target rests at $58.87.

Sentiment turns quite bullish, however, when we turn to expectations from options traders. Specifically, the August put/call open interest ratio currently comes in at 0.57, with calls nearly doubling puts among near-term options. This ratio rises slightly to 0.60 when looking at the weekly July 27 series. This is likely due to expected volatility immediately following Intel’s earnings.

Speaking of volatility, August implieds are pricing in a potential move of about 5% for INTC stock. As such, the upper bound lies at $55, while the lower bound lies at $50.

2 Trades for INTC Stock

Call Spread: Overall, I expected the hype surrounding AMD taking market share to fade a bit following Intel’s earnings. In fact, I would expect INTC stock to rally following tomorrow’s report, as bearish fears are alleviated by the results.

Traders looking to bet bullish on INTC stock might want to consider an August $54/$55 bull call spread. At last check, this spread was offered at 35 cents, or $35 per pair of contracts. Breakeven lies at $54.35, while a maximum profit of 65 cents, or $65 per pair of contracts, is possible if INTC closes at or above $55 when August options expire.

Put Spread: On the other hand, the situation with market share losses could be much worse than analysts anticipate. We’ll get a hint at this ahead of time tonight with AMD’s report. Those traders looking to side with the bears ahead of Intel earnings might consider an August $50/$51 bear put spread. At last check, this spread was offered at 21 cents, or $21 per pair of contracts.

Breakeven lies at $50.79, while a maximum profit of 79 cents, or $79 per pair of contracts, is possible if INTC closes at or below $50 when August options expire.

As of this writing, Joseph Hargett was long on AMD stock.