AMD

My best regards to all of you, folks, have a good weekend. I'll not waste much of your time with a long read today. I just came to say ... I love you, like Stevie Wonder... of course, that's true, but... I also came to say that I have my personal shortlist of stocks, which I feel comfortable to purchase as soon as this Wall Street's rough and nervous mood will ultimately disappear. I mean, I am going to buy stocks from the list when more or less clarity on the U.S. elections outcome would finally replace currently increased levels of market volatility. In case of already existing trades, I mean an opportunity to seize the right moment to add more to my volume of stakes in particular stocks at better prices. Today, I share the first point from the list - to be continued next week...

Advanced Micro Devices (AMD) justifiably gathered its bullish momentum to climb by nearly 18% for the last two months, but wasted all of the gains in the couple of days after its quarterly report at the end of October. Today's price is well below $145 vs AMD's summer high at $187.28. Some accidental touching of September's low at $132.11 or even a re-test of annual dips below $122 cannot be ruled out. A profit/risk ratio is better than 2:1 even nominally, if we count it based on the current annual range. Yet, any kind of a bearish turn in the mid-terms is not demanded by logic. Now I'll tell you why. The second most important chipmaker after the AI darling NVIDIA actually posted its nearly record EPS (earnings per share) of $0.92 for Q3, and a full measure of AMD's sin in this context was being in line with consensus projections, with the excited crowd being clearly hungry for more. Again, the Data Centre segment of AMD's business more than doubled YoY to achieve $3.5 billion, but another fault was that AMD previously provided a too rosy forecast of selling more than $4.5 billion worth of AI processors in 2024, which would not be the case anymore.

The firm's own Q4 revenue forecast of $7.5 billion, plus or minus $0.3 billion, should not trail investing hopes as the midpoint of AMD's guidance range was only $0.05 billion below the analyst estimates of $7.55 billion on average, while Q3 revenue came in at $6.82 billion. The number beat the same analyst pool's prediction of $6.71 billion to set a new historical high, providing a 22% increase YoY. Therefore, AMD sees "significant growth opportunities across our data centre, client and embedded businesses driven by the insatiable demand for more computing," according to AMD Chair Dr. Lisa Su. She noted that it was mostly supply chain constraints that hampered the manufacturer's ability to grow faster, while demand for AI chips is still growing strongly. So, investors have no reason for a bitter cry.

I would describe a few more ideas from my shortlist in a few more days. We have enough time for this as the votes counting on the other side of the pond is going to be long. Right now your "Scheherazade" is going to take a rest in this All Hallows' Eve of Friday and wishes you to do the same.