AMD stock price forecast ahead of earnings as a risky pattern forms
AMD stock price continued its strong rally this year as demand for semiconductor chips gained steam. It was trading at $246 on Monday, up by 220%5 from its lowest level in 2025, with its market capitalization soaring to over $400 billion. So, will the stock rally or crash after releasing its earnings on Tuesday?
AMD’s business is facing major headwinds
Advanced Micro Devices, which Lisa Su runs, has become a major player in the artificial intelligence (AI) industry, where it provides quality chips that are used widely in data centers around the world. Its chips are the second most popular ones after NVIDIA.
The stock has been in a strong bull run in the past few months after its last financial results showed that its business growth trajectory continued. It also accelerated after reaching a multi-billion-dollar deal with OpenAI, the creator of ChatGPT.
AMD is facing some major challenges. For example, the ongoing geopolitical tensions between the US and China have disrupted its Chinese business, which is the biggest in the world.
At the same time, companies like Microsoft, Alphabet, and Amazon are building their ASIC chips. Some of these companies have hinted that they will start selling their chips to third parties, which may affect their future sales.
Chinese companies like Huawei and Moore Threads are also closing the gap with Western chips. At the same time, NVIDIA has hinted that it was entering the CPU industry, a move that will affect its business.
AMD to publish strong results
Additionally, there are concerns on whether the AI business will continue booming in the future. For example, the recent Microsoft results showed that its cloud computing business was slowing despite the rising investments.
Wall Street analysts are highly optimistic that its business continued doing well last quarter. The average estimate is that its revenue jumped by 26% to $9.6 billion, while its earnings per share (EPS) soared by 25% to $1.32.
This growth will be driven by the AI data center segment and the ongoing PC refresh cycle. AMD has a long record of beating analysts’ estimates, meaning that its financial results will be higher than expected.
The company’s annual revenue growth for 2025 is expected to be $34 billion, up by 32% YoY. It will then grow by 32% this year.
These numbers mean that the company’s business is not overvalued. For example, its forward price-to-earnings (P/E) ratio of 37 is lower than that of other AI companies.
Additionally, its forward revenue growth is about 32% while its net income margin is 10%. This means that its rule-of-40 metric is 42%, which is a sign that it is balancing between revenue and profitability growth.
AMD stock price technical analysis
AMD share price chart | Source: TradingView
The three-day chart shows that the AMD share price rebounded and peaked at $266. It has formed a double-top pattern at that level and a neckline at $194.
The stock has also formed an island reversal pattern, which often leads to a retreat. Therefore, there is a risk that it will drop after releasing its financial results.
The bearish outlook will be invalidated if it moves above the key resistance level at $266.75. Such a move will point to more gains towards $300.
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