Earnings Solid, But Is There Still Upside to Chase in AMD?

Check out this momentum strategy with an 84% win rate—

$Advanced Micro Devices(AMD)$ ’s Q2 earnings didn’t deliver any extra surprises:

• Q2 results were mainly driven by growth in the gaming console segment;

• Q3 revenue guidance of $8.4–9.0 billion came in above expectations;

• Rising operating expenses weighed on profits;

• Potential sales from the MI308 chip were not included in guidance, showing a conservative stance;

• The MI400 series AI chips, launching in 2026, are the ultimate driver for AMD’s stock value;

How to interpret the earnings:

• The market has already priced in high AI growth expectations;

• AMD’s share price declined due to short-term factors, but the more important long-term value shouldn’t be ignored;

• Based on a 30x multiple of 2026 expected EPS ($6.05), AMD’s price target is $180.

Trading strategy:

• If you currently hold AMD shares and are concerned about the stock consolidating at high levels, you can sell out-of-the-money call options to earn premium during this phase;

• If you want to chase upside in AMD but are worried about getting trapped at the top, consider selling out-of-the-money put options.

Reference strikes and expiries:

• Covered call strategy: $AMD 20250815 185.0 CALL$  (86% win rate)

• Put selling strategy: $AMD 20250815 160.0 PUT$  (84% win rate)