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Advanced Micro Devices Options Trade Is A Winner!

Weekly Options Members” Make
104.60% Potential Profit In One (1) Trading day!

More to Come?

April 4, 2021

Advanced Micro Devices has staged an amazing turnaround over the past five years, fueled by new products and improved profitability. And AMD stock has climbed as a result.

“Weekly Options Members” managed to gain a potential profit of 104.60% within the trading day.

More upwards movement is expected, and for those that have exited the trade, a new trade may be considered.


Advanced Micro Devices, Inc. (NASDAQ:AMD)

The Actual Recommended Trade.....

** OPTION TRADE: Buy AMD APR 09 2021 80.000 CALLS at approximately $1.00.

The Profit Explained…..

Weekly Options Members” entered a trade on Advanced Micro Devices Thursday, April 01, 2021 for $1.08, at market opening.

By 3.00pm the price of the option had hit $2.21 – a nice profit of 104.6%.


Why The Trade Recommendation On Advanced Micro Devices?

The Santa Clara, Calif.-based company Advanced Micro Devices, Inc. (NASDAQ:AMD), a global semiconductor company, has been on a roll under the leadership of CEO Lisa Su, who took over in 2014.

Over the last few years, it has delivered competitive chip products for PC gaming and data centers. Furthermore, AMD has a strong product pipeline. In particular, its Zen-based 7-nanometer (nm) processors could take more market share away from Intel, which has suffered delays in releasing its 7 nm chips.

Revenue surged last year, thanks to consumers buying AMD-powered laptops for working from home and strong demand for server processors.

However, AMD stock hit a 52-week high in January this year, but the price for this high-flying chipmaker has pulled back over 20% since then thanks to a variety of factors such as the broader sell-off in tech stocks and rival Intel's (NASDAQ:INTC) resurgence under new leadership.

The Major Catalysts for This Trade.....

1. Earnings Report.....

Looking at Q4, AMD earned $570.00 million, a 26.95% increase from the preceding quarter. Advanced Micro Devices also posted a total of $3.24 billion in sales, a 15.82% increase since Q3. Advanced Micro Devices earned $449.00 million, and sales totaled $2.80 billion in Q3.

Advanced Micro Devices reported Q4 earnings per share at $0.52/share, which beat analyst predictions of $0.47/share.

2. Return on Capital Employed.....

In Q4, Advanced Micro Devices posted an ROCE of 0.1%.

Return on Capital Employed is an important measurement of efficiency and a useful tool when comparing companies that operate in the same industry.

For Advanced Micro Devices, the return on capital employed ratio shows the number of assets can actually help the company achieve higher returns, which should payoff from long-term financing strategies.

3. Eating Intels’ Market Dominance.....

For several years now, Advanced Micro Devices has eaten away at Intel’s market dominance in the CPU segment. Intel, however, with a new CEO at the helm, has been devising its comeback program.

However, Northland analyst Gus Richard calls Intel’s latest move a “strategic faux pas” that plays right into its CPU rival’s hands.

“We do not believe TSMC will relinquish its manufacturing lead to INTC any time soon and process technology leadership drives product leadership and GM higher,” said the analyst. “INTC expansion into the foundry market will increase AMD as a priority for TSMC and INTC will be persona non grata. For this reason, we expect AMD's market share momentum to continue.”

AMD’s and Xilinx’ – soon to be part of AMD - leading-edge volume is produced at TSMC, more wins for them means more business for TSMC.

“This will likely result in AMD getting earlier access to technology and better capacity allocation, cementing the Company's x86 process technology leadership for the foreseeable future,” Richard opined.

4. Analysts Positivity.....

As such, Richard reiterated an Outperform (i.e. Buy) rating on AMD shares along with a $96 price target. The analyst, therefore, anticipates gains of 24% over the coming months.

Also, AMD has been the subject of a number of recent analyst reports.....

  • Rosenblatt Securities raised their price objective on shares of Advanced Micro Devices from $120.00 to $135.00 and gave the stock a “buy” rating in a research note on Wednesday, January 27th.
  • Wedbush increased their target price on shares of Advanced Micro Devices from $100.00 to $110.00 and gave the stock an “outperform” rating in a research report on Tuesday, January 12th.
  • Truist increased their target price on shares of Advanced Micro Devices from $96.00 to $101.00 in a research report on Wednesday, January 27th.
  • Finally, Barclays raised their price target on shares of Advanced Micro Devices from $115.00 to $120.00 and gave the company an “overweight” rating in a report on Wednesday, January 27th.

Three equities research analysts have rated the stock with a sell rating, eight have issued a hold rating and twenty-one have assigned a buy rating to the company’s stock. Advanced Micro Devices currently has an average rating of “Buy” and an average target price of $90.39.

5. The Pullback Is A Positive.....

One look at the pace of AMD's growth and its outlook for the year tells us that the recent sell-off in the stock may not be justified. The chipmaker ended 2020 on a high and expects to deliver massive growth once again this year.

The change in a company's future earnings potential, as reflected in earnings estimate revisions, and the near-term price movement of its stock are proven to be strongly correlated. The influence of institutional investors has a partial contribution to this relationship, as these big professionals use earnings and earnings estimates to calculate the fair value of a company's shares.

Advanced Micro Devices is expected to earn $1.93 per share for the fiscal year ending December 2021, which represents a year-over-year change of 49.6%.

Analysts have been steadily raising their estimates for Advanced Micro. Over the past three months, the Consensus Estimate for the company has increased 7.7%.

For Advanced Micro Devices, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.

AMD can be expected to raise its game by the time Intel's 7nm chips hit the market by transitioning to the competing 5nm manufacturing node within the next couple of years. A smaller processing node will allow Advanced Micro Devices to pack more transistors closer to each other, leading to improved computing performance and lower power consumption.

Therefore, Advanced Micro Devices can remain ahead of Intel once it makes the transition to a smaller 5nm process node. Chipzilla is unlikely to regain its technology lead until the launch of its own 5nm process, the timeline for which is unknown right now. As it turns out, AMD's foundry partner Taiwan Semiconductor Manufacturing is reportedly working to increase the production capacity of 5nm chips. That should bode well for AMD, as it is expected to become TSMC's second-largest customer and enjoy stronger bargaining power.

Additionally, AMD can be expected to keep up the pressure on Intel in the data center space after the launch of its latest EPYC server processors. AMD claims that the latest EPYC 7003 processors based on the 7nm process are twice as fast as Intel's competing chips. Third-party tests conducted by AnandTech indicate the same.

More importantly, AMD has a solid lineup of clients using the latest EPYC server processors. They include Amazon, Cisco, Dell Technologies, Alphabet's Google, Microsoft, Lenovo, and Tencent. So it won't be surprising to see AMD log big gains in the data center market in both the short and the long run.

Moving Forward…..

For the current quarter, AMD expects to generate revenue of $3.2 billion, up 79% from the year-earlier period. Wall Street analysts predicted AMD sales of $2.73 billion in the first quarter.

For the full year, AMD expects sales to rise 37% to $13.38 billion. Analysts had been looking for 2021 revenue of $12.24 billion.


Advanced Micro Devices competes with Intel (INTC) in making central processing units, or CPUs, for personal computers and servers. It also rivals Nvidia (NVDA) in the market for graphics processing units, or GPUs, for PCs, gaming consoles and data centers.

Founded in May 1969, Advanced Micro Devices went public in September 1972. AMD shifted to a fabless semiconductor business in March 2009 by spinning off its factories into a joint venture called GlobalFoundries.

Current Chief Executive Lisa Su took the reins in October 2014. She shepherded the Santa Clara, Calif.-based company into a new era with its Ryzen PC processors and Epyc server chips in 2017.

Advanced Micro Devices continues to gain share in CPUs for servers during the fourth quarter. Its server CPU market share was 7.1% in the December quarter. That compares with 6.6% in the September quarter and 4.5% in the year-earlier quarter.

The next potential catalyst for AMD stock will be the company's first-quarter earnings report, due in late April.


Will Advanced Micro Devices Continue To Provide Profit?

Will We Recommend Another Trade On Advanced Micro Devices?

What Other Trades Are We Anticipating?

Do You Wish To Be Part Of This Action?

For answers, join us here at Weekly Options USA, and get the full details on the next trade.

Join us today and find out!

While there are many more areas that can help to explain option trading, this is a basic overview of what stock options are, and where and how they started.

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