AMD shares fell 10.88% in a single session on Friday, October 30. Close - $504.80 versus $566.42 the day before. The company had no news of its own that day.
The reason was external. The previous evening, Intel - AMD's direct competitor in the PC processor market - gave weak guidance. The market priced that decline into AMD in advance, without waiting for its report.
Why this matters to a trader. AMD's third-quarter report comes out on November 3, and the stock enters the release noticeably cheaper than it was on Wednesday.
How strong was the move?
The numbers behind the move. Intraday, the stock reached $492.21.
- $504.80 - closing price on Friday, October 30
- $566.42 - close the day before
- $578.44 - closing price on Wednesday
- 39.7 million shares - volume, roughly double each of the four previous sessions
Two-day result. Over two sessions, about $74 came off the stock.
Why did it fall without news of its own?
Intel's guidance. On Thursday evening, Intel gave fourth-quarter revenue guidance of $15-16 billion. The company warned that its consumer PC segment would drop more than 20% versus the previous quarter.
- The CFO's words. David Zinsner said the PC market downturn would last at least until the first half of next year.
- The cause of the downturn. High memory prices.
- The spillover to AMD. AMD sells PC processors in direct competition with Intel. The market priced the same downturn into its client business before AMD itself said anything.
What to expect from the report?
The nearest date. The third-quarter report is on Tuesday, November 3, after the US market close. The investor call is at 01:00 Moscow time on November 4.
- about $13.0 billion - AMD's own revenue target, plus or minus $300 million, a 41% year-over-year increase
- roughly 56% - gross margin target
- $13.09 billion - revenue consensus
- $1.95 and $1.94 - earnings per share estimates from some data providers
- $1.68 - earnings per share estimate from Zacks
Earnings estimates diverge, so before comparing, check which base the headline used. It's convenient to keep the publication date in the economic calendar.
What does this mean for a trader?
Context for a trader. The previous quarter was a record: revenue +50% to $11.5 billion. Data centers doubled to $6.7 billion, the client segment grew 23% to $3.1 billion, which is 27% of sales.
The price of risk. Options price in a move of ±8.8% in either direction, versus a ten-year average of 10.6%. That's how much the market pays for insurance against a jump on the report.
Key point: the stock enters the release roughly $60 cheaper than on Wednesday. If you're sizing volume for this kind of volatility, check your program's limits in the prop firm catalog.
Planning to trade AMD's report on Tuesday?
The numbers come out deep in the night, Moscow time. You won't be able to adjust your position at that point.
After that, it comes down to risk arithmetic. The expected ±8.8% on a single stock is larger than the daily loss limit in most prop programs, where it's 4-5% of nominal.
A single position of normal size can close an account overnight, even if it's back in the green by evening. That's why, before the report, traders calculate allowable volume and check whether the program allows the stock on the day of publication.