To The Moon

AMD Earnings Preview: High Stakes for the Data Center and the Bridge to MI455 Global semiconductor giant $Advanced Micro Devices(AMD)$ is set to release its Q4 earnings after the closing bell on February 3, Eastern Time. Previously, the market narrative surrounding a shortage of server CPUs drove a rally for both $Advanced Micro Devices(AMD)$ and $Intel(INTC)$ , but this momentum was briefly interrupted by Intel's disappointing financial results. Recently, market sentiment has been tested by rumors suggesting a delay in the mass production of the MI455 rack, a core growth driver for this year, as well as concerns over AMD's heavy reliance on $Oracle(ORCL)$ and OpenAI orders. All eyes are now on management's response to these critical issues. Core Financial Indicator – Revenue: Consensus estimate is $9.65 billion, up 26% YoY and 4% QoQ. Previous guidance was $9.6 billion. – Gross Margin: GAAP consensus is 53.1%, up 2.4 ppts YoY and 1.4 ppts QoQ. Non-GAAP consensus is 54.5%, up 0.4 ppts YoY and 0.5 ppts QoQ, matching previous guidance. – Operating Income: GAAP operating income is expected at $1.65 billion, up 89% YoY and 30% QoQ. Non-GAAP operating income is expected at $2.47 billion, up 22% YoY and 10% QoQ. – Net Income: GAAP net income is projected at $1.34 billion, up 178% YoY and 8% QoQ. Non-GAAP net income is projected at $2.18 billion, up 23% YoY and 11% QoQ. Previous guidance was $2.15 billion.s Three Things to Watch Will exploding server CPU demand break the seasonal weakness in Q1? In our previous analysis of the logic behind Intel's stock surge, we noted that the market was beginning to focus on how the AI inference era is driving a sharp spike in CPU demand, potentially leading to shortages similar to those seen in the memory sector. This narrative subsequently gained traction on Wall Street. Intel, having already released its Q4 results, confirmed strong demand for server CPUs, which drove a 15% QoQ increase in DCAI revenue and six consecutive quarters of margin improvement. However, Intel remains constrained by capacity issues. Theoretically, AMD faces fewer capacity bottlenecks as it relies entirely on $Taiwan Semiconductor Manufacturing(TSM)$ , leading the market to place high hopes on its performance. The consensus estimate for AMD's Q4 Data Center revenue is $4.97 billion, up 29% YoY and 15% QoQ. This would position AMD to surpass Intel's data center revenue for the second consecutive quarter. Operating income is expected at $1.48 billion, up 28% YoY, with an operating margin of 29.7%, well above Intel's 26.4%. However, it is worth noting that Intel management did not mention storage-style price hikes for CPU ASPs, differentiating this cycle from the "steep price ascent" seen in the oligopolistic memory market. Given that Intel guided for a high single-digit QoQ decline in Q1 data center revenue, investors should watch closely to see if AMD's data center business can drive total revenue to defy typical seasonal weakness. Will management provide 2026 AI revenue guidance? Focus on the smooth transition before MI455 shipments in H2 The current AMD AI chip roadmap slates the MI400 series for release in 2026, with the MI455 series specifically shipping in the second half of 2026. Since the 6GW order from OpenAI begins with the MI455 series, this revenue will not materialize until H2. This creates a critical "air pocket" between now and late 2026. Whether AMD's data center GPU business can transition smoothly during this interim period is a major question, and the market is desperate for management to provide specific 2026 AI revenue guidance. Last quarter, management only offered a vague outlook of "tens of billions" in annual revenue by 2027 without specific guidance for 2025 or 2026. While the analyst day last year outlined 3 to 5 year growth targets, those horizons remain too distant for current investors. How will memory price hikes impact the 2026 PC and Gaming businesses? The Client business, primarily PC CPUs, has a Q4 revenue consensus of $2.89 billion, up 25% YoY. It accounts for 30% of total revenue, making it AMD's second-largest segment. The Gaming business, driven by PS/Xbox consoles and PC graphics cards, has a Q4 revenue consensus of $0.86 billion, up 52% YoY, accounting for 9% of total revenue. Together, these segments contribute 39% of AMD's revenue and are vital to the company. However, considering Intel's recent comments regarding memory price hikes suppressing demand in the consumer electronics market, the growth potential for this portion of AMD's business in 2026 is in doubt. This is particularly concerning given that Intel guided for a double-digit QoQ decline in its Q1 Client business. Option Market Signals Options markets are flashing a distinctly cautious tone heading into AMD's earnings release, with the elevated 1.12 Put/Call ratio across 3.13 million contracts of open interest suggesting that traders are hedging against potential downside rather than chasing upside exposure. The volatility is particularly striking as Implied Volatility stands at 65.19% compared to Historical Volatility of 51.54%, driving the IV Percentile to a lofty 85% that signals options premiums are near their highest levels of the past year. Meanwhile, the February 6 weekly expiration reveals concentrated put activity clustered around the $205 to $215 strike range, indicating that market participants are building protective positions or outright bearish bets ahead of what promises to be a high stakes print for the semiconductor giant. Summary Overall, market expectations for AMD's performance this quarter are very high. Investors are hoping management delivers a report where the Data Center segment beats expectations, especially since AMD's Forward PE valuation is now significantly higher than competitors like $NVIDIA (NVDA.US)$ and $Broadcom (AVGO.US)$ . This premium valuation comes against a backdrop of lingering doubts regarding the fulfillment of orders from major customers like $Oracle (ORCL.US)$ and OpenAI. Looking at the closing performance on earnings day over the past nine quarters, the stock has posted gains only four times. @TigerStars @CaptainTiger @TigerWire @Daily_Discussion @Tiger_chat @Tiger_comments @MillionaireTiger