AMD’s earnings report showed mixed results. The adjusted earnings per share (EPS) was $0.48, slightly below the expected $0.49. However, revenue was strong at $7.69 billion, beating forecasts of $7.40 billion. The company faced $800 million in inventory and related charges because of U.S. export controls. For the third quarter, AMD predicts revenue will reach $8.7 billion, higher than the anticipated $8.31 billion. They expect a GAAP gross margin of about 54%. This revenue outlook does not factor in potential earnings from MI308 AI chip shipments to China due to regulatory issues. Following this announcement, AMD’s shares rose by about 2%. Looking back at late 2022, AMD’s earnings report showed both challenges and strengths. The company faced significant inventory costs due to new U.S. export laws but gave strong guidance for the future. This created uncertainty, which can be leveraged by traders. After such reports, implied volatility often drops as immediate earnings risks fade. This is a good time for traders to buy options at lower prices for upcoming weeks. The market is now processing this news and looking for the next big event. The strong guidance back then hinted at an AI boom that boosted AMD’s stock throughout 2023 and 2024. Recent reports as of mid-2025 indicate AMD has captured nearly 35% of the data center AI accelerator market. Traders may consider buying call options to take advantage of this positive trend. The cautious forecast excluding MI308 sales to China turned out to be a smart choice. Nonetheless, the inventory charge related to China highlights ongoing geopolitical risks. Given the tech tensions since the early 2020s, buying put options could be a wise move to guard against unexpected regulatory changes. This risk is crucial for the stock’s future performance. For those wanting to minimize risk, a bull call spread could be a useful strategy. This involves buying a call option at a lower strike price and selling another at a higher strike price. This strategy limits potential profits but also lowers initial costs, making it a way to bet on moderate upward movement in the coming weeks. The modest 2% increase in share price after the 2022 report indicates that the market was balancing both positives and negatives. Today, there’s considerable optimism about AI already priced into the stock after its significant rise. Any positive news in the coming weeks will need to be substantial to provoke another big move, as high expectations have become the norm.

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