AMD: A Measured Look Before Earnings

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The share price of Advanced Micro Devices (AMD 6.13%) has been, shall we say, energetic. As of February 2nd, it displays a year-to-date increase of 10.5%, and a rather more substantial 104% over the past twelve months. The company is due to report its earnings on February 3rd. The question, for those who seek a return on investment rather than mere speculation, is whether this momentum justifies entry at the current price.

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The Numbers, Briefly Stated

AMD occupies a significant position in the semiconductor market, particularly in the provision of components for data centers, bespoke chips, and personal computers. Under the direction of CEO Lisa Su, who assumed leadership in late 2014, the company’s market capitalization has expanded from a modest $3 billion to a substantial $400 billion. This growth, while impressive, does not, of itself, guarantee future prosperity.

Revenue has, predictably, followed suit. The last quarterly report indicated a turnover of $9.2 billion, a 36% increase year-on-year. Gross profit rose by 40%, and net income and earnings per share by 61% and 60% respectively. These figures, while positive, are presented as if self-explanatory. A prudent investor requires more than mere percentages.

Rumors persist of potential production delays concerning AMD’s next-generation MI-450 AI accelerators. The company has, as yet, offered no formal confirmation. Such delays, should they materialize, would undoubtedly exert downward pressure on the share price in the short term. However, the long-term outlook remains, at least on the surface, promising. Analysts generally anticipate that AMD will exceed expectations in its forthcoming earnings report, a prediction which carries its own inherent risks.

A Long View, Not a Sprint

It is unlikely that AMD will overtake the industry leader, Nvidia, in the immediate future. However, the market is vast, and AMD demonstrates itself to be a robust company with competent leadership. For an investor seeking to participate in the current enthusiasm for AI chips, AMD presents a reasonable, if not exceptional, choice. Whether one buys before or after the earnings report is, in the grand scheme, of little consequence, provided the investment is approached with a long-term perspective. Should AMD’s leadership revise its guidance upwards on February 3rd, it would, of course, provide a further, though not necessarily sustainable, impetus to a share price already displaying considerable vigor.

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2026-02-02 17:02