Traders Brace for a Big Earnings Move from AMD Stock

Earnings season is in full swing on Wall Street, and semiconductor giant Advanced Micro Devices (AMD) is expected to report its fourth-quarter results next Tuesday, Feb. 4, after the market closes. Ahead of the event, AMD options traders appear to be bracing for a bigger-than-usual price swing in the shares following the release.

Specifically, AMD’s at-the-money straddle is pricing in a post-earnings move of 7.70%, compared to the stock’s average move of 6.78% following its last four earnings events. After last January’s fourth-quarter report, AMD dropped by just 3.24% on the day.

Like many other semiconductor stocks with artificial intelligence (AI) exposure, AMD stock declined earlier this week, largely due to concerns over competitive pressures from new low-cost AI models like DeepSeek. That continues a trend of underperformance from AMD, which sports a one-year return of -31.32%.

Despite this, AMD's strategic advancements in AI-capable CPUs and its growing presence in the data center market position it as a formidable competitor to industry leader Nvidia (NVDA). Arguably, AMD stock could be undervalued, with potential for significant growth, especially as it expands its AI and personal computing segments. The forward price/earnings-to-growth (PEG) ratio for AMD is 0.81, which is a discount to AI chip stocks like NVDA and Marvell Technology (MRVL).

However, AMD stock has lost a few of its most fervent supporters on Wall Street, with the number of “Strong Buy” recommendations among analysts down to 28 currently from 31 a couple of months ago. That said, the semiconductor stock is still a top-rated name, and the average price target of $172.89 implies expected upside of 45.5% over the next 12 months.