To The Moon

On Mon, 31 July the US market continues to inch up slightly higher Monday as investors waited with abated breath for the following companies’ quarter earnings:

• $Advanced Micro Devices(AMD)$ on 01 Aug (pm).

• $Apple(AAPL)$ on 03 Aug (pm).

• $Amazon.com(AMZN)$ on 03 Aug (pm).

• $Berkshire Hathaway(BRK.B)$ on 04 Aug (tbd).

By the time market closed:

• DJIA: +0.28% (+100.24 to 35,559.53).

• S&P 500: +0.15% (+6.73 to 4,588.96).

• Nasdaq: +0.21% (+29.37 to 14,346.02).

• Looking at the 3 composite indexes (see above), US market opened on a “high” but trended downwards, falling below Friday’s closing. Market managed to stage a recovery just before market closed.

The other element that investors are waiting for will be the official data for monthly NonFarm-Payrolls (NFP) report due out on Fri, 04 Aug.

Reasons why NFP is market’s and investors’ focus:

It can identify trends in the followings:

• Economic growth.

• Inflation.

• Housing starts.

• US gross domestic product (GDP).

All of which affect the US stock market movement.

Looking at US pre-market indicators data (see above); it looks like the market might undergo a “correction” after experiencing daily highs for the past week.

As long as the tumble is not too drastic, it should be fine.

Advanced Micro Devices will be releasing its Q2 2023 earnings after market close today. It is definitely a tough act to be reporting ahead of “leader” $NVIDIA Corp(NVDA)$.

What Should We Be Expecting?

A quick recap of Q1 2023 earnings is in order:

• Revenue: came in at $5.4 Billion, a -9% decline YoY.

• Gross margin (GAAP): pegged at 44%, a -4% decline YoY.

• Operating loss: was -$0.10 Billion

• Loss per share (GAAP): -$0.09 cents.

Structurally, AMD’s revenue stemmed from following segments:

• Data Centre. Came in flat YoY.

• Client. Down by -65% YoY.

• Gaming. Down by -6% YoY.

• Embedded. Up by +163% YoY.

In case investors are wondering where AMD is with regards to all things Artificial Intelligence (AI), it is heartening to find that AMD has its suite of products, targetted specifically to AI (see below).

Rounding it off would be AMD’s technology that is keeping the company at the forefront (see below).

For Q2 2023, Wall Street is expecting the following results:

• Revenue: $5.31 Billion YoY.

• Earnings per share : $0.57 cents.

• Comparatively speaking, current expectations is a “shade” lower when revenue was $6.55 Billion and EPS perched at $1.05.

My Viewpoint

• The downbeat forecast for top and bottom line figures (see above) for Q2 2023 highlights the setbacks within the (a) PC market and (b) datacenter business segments that have impacted the quarterly results.

• AMD is navigating headwinds including inflationary impacts on its high-margin enterprise business.

• Should be upbeat about the graphic processing unit (GPU) as the industry is expected to grow more than 30% annually over the next five years.

• Am quite certain that AMD will bounce back from its challenging Q1 2023, that saw a double-digit decline in the share price as revenue declined by -9%.

Finally, if AMD's growth metrics rebound from Q1 2023 and Management issues a strong guidance, this would present a great buying opportunity for AMD stock for the next 12 to 18 months.

And this is how I see AMD from afar.

• Do you think AMD will report a better set of results for this quarter?

• Do you think AMD will be able to lift the US market throughout trading Tuesday?

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