AMD share price on a tear pre-earnings
Advanced Micro Devices Inc. (AMD) is estimated to release their second quarter earnings on 23 July with the market watching the latest sales performance and guidance to assess the current rally.
AMD share price: 3 things to watch out for in Q2 results
1. Sales performance
Following the solid Q1 2019 growth performance and launch of its new Ryzen desktop central processing units (CPUs), AMD’s share prices had been on a tear, chalking up gains of more than 80% mid-July ahead of its Q2 2019 earnings release. With strong expectation of sales growth for 2019 – placed at a ‘high single digit percentage’ range according to the company – the upcoming report will be scrutinized for its performance on this end.
According to the current market consensus polled by Refinitiv, revenue for Q2 2019 is expected to be at $1.52 billion, falling near the mid of the AMD’s guidance range. If materialized, this will reflect an uptick from the previous quarter but nevertheless mark a 13% drop from the same period last year. Earnings per share is estimated to come in at 8 cents. Note that reports had also suggested thus far that the strong US dollar had been a concern for many companies with significant overseas sales, a characteristic shared by AMD where only one-fifth of revenue had been generated domestically in the US in 2018.
While the reflection on AMD’s Q2 performance will be critical for prices, the guidance coming through will be of higher importance as we move forth into H2. AMD’s share price had soared on the announcement of the new third-generation Ryzen CPU and these new product launches are expected to power AMD into the second half. Reports had also suggested that based on data from Danawa Research, AMD’s latest Ryzen CPUs had exceeded that of competitors in major Asia markets, one that should boost confidence for outlook. With the market pricing in the expectation of the current full-year guidance, any amendments here will also play to price movements.
Notably, while AMD had led competitors such as Intel and NVIDIA in terms of price performance at both the start of the year and in 2018, poor guidance from NVIDIA had been one to likewise affect AMD in its Q1 earnings release. Intel and NVIDIA are estimated to release earnings on July 26 and August 16 respectively, ones to watch.
3. Macro backdrop
As alluded to in our US Reporting Season preview, the season on balance is shaping up to be a negative one. That said, AMD is expected to hold the fort into H2. This comes with the recovery of the Philadelphia Semiconductor Index (SOX) as shown in the chart below. Prices can be seen once again approaching the April’s high after the escalation in trade tensions with China briefly weighed on it.
The macro backdrop coupled with earnings performance of the broad market and tech sectors alike are nevertheless items to watch as the bulk of the earnings get released into end-July.
Source: MarketWatch, FactSet
AMD share price: technical analysis
From a technical perspective, AMD share price have clearly exhibited strong upward momentum, keeping to the uptrend. The icing on the cake for bulls had perhaps been the latest clear breakout of the $32.62 resistance. That being said, an overbought situation looks to be forming that could invite some caution particularly ahead of the earnings release, one to watch. Uptrend support nevertheless expected to hold, unless a severe disappointment is seen in the set of Q2 releases.
Source: IG Charts
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
See opportunity on a stock?
Don’t miss your chance. Try a risk-free trade in your demo account, and find out whether your hunch could have paid off.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance. Upgrade to a live account to take advantage.
- Trade a wide range of popular global stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform, when it matters
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.