AMD Stock Soars Over 100% Since April Lows, Raising Earnings Concerns

AMD's stock has experienced a significant surge, more than doubling since April's lows. However, some analysts suggest this rapid appreciation may pose risks ahead of the company's upcoming earnings report. According to Jefferies analysts, the recent rally has been driven by optimism surrounding the easing of trade tensions—particularly the potential resumption of chip sales to China—and the rising demand for artificial intelligence (AI) solutions. Despite these positive factors, they caution that the stock might be overheated and anticipate a possible decline following the earnings release. Currently, AMD and Nvidia have not received approval to resume chip shipments to Chinese firms, which could lead to more conservative guidance from AMD regarding its China sales prospects. Additionally, the analysts highlight that recent strong performance in AMD's client segment was partly influenced by customers making additional purchases amid tariff uncertainties, leading to inflated average selling prices that may normalize in the future. For the second quarter, analysts forecast AMD to report revenues around $7.4 billion and adjusted earnings of approximately 48 cents per share. The dat...