Advanced Micro Devices reported record third-quarter revenue of $13.377 billion, up 45% year over year, as Data Center sales nearly doubled after the company’s shares fell sharply ahead of results.
AMD’s price history shows its shares closed at $504.80 on Oct. 30, down 10.88%, then at $466.84 on Nov. 2, down 7.52%.
Before the earnings release, CNBC Pro contributor Julia Spina outlined a position combining a Nov. 4 $425/$415 put spread and a $510/$520 call spread. CNBC reported an estimated credit of about $3.65 per share, based on the Nov. 2 close, and disclosed that Spina held the position.
CNBC estimated a maximum gain of $365 for one combined position if AMD closed from $425 to $510, with breakeven points at $421.35 and $513.65. It put the maximum loss at $635 for a close below $415 or above $520. A close in the lower strike band could leave the trader obligated to buy 100 shares per spread at $425; a close in the upper band could lead to assignment of the short call and a short-stock position.
CNBC estimated that the options priced in a move of roughly 9% through expiration. CNBC calculated AMD’s average close-to-close move across its previous 10 earnings reports at 8.4% and said 30-day implied volatility exceeded levels recorded on about 81% of days in the prior year. AMD had released its results before the options expired, but CNBC’s article did not give the position’s outcome.
Data Center revenue climbed 97% to $8.546 billion. AMD attributed the increase to demand for EPYC processors and the launch of Instinct MI450 Series GPUs. In the previous quarter, the segment recorded $6.7 billion in revenue, according to AMD’s fiscal second-quarter results.
Client and Gaming revenue declined 8% to $3.722 billion, including a 40% drop in Gaming revenue to $773 million. Embedded revenue rose 29% to $1.109 billion. GAAP diluted earnings per share were $1.46, up 95%, while non-GAAP diluted earnings per share reached $2.09, up 74%.
AMD forecast fourth-quarter revenue of about $17 billion, plus or minus 3%, and non-GAAP gross margin of about 55%. The company said the revenue midpoint would represent approximately 66% year-over-year growth. Chair and CEO Dr. Lisa Su said, “We delivered a record quarter with revenue exceeding the high end of our guidance.” The options position was due to expire Wednesday, Nov. 4.
