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Why did AMD drop when beat estimates?

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  • scarlight : they expected more revenue 7.5 billions not 6.5 billions

  • DavidCCL : Investor's expectation for Q4 is 7.55b not 7.5b, AMD falls short on this.

  • digimonX DavidCCL : There is manipulation going on. 7.55b vs 7.5b means 50 million difference. Broadly speaking, 50 million is really just noise. AMD will beat this "noise" next quarter. The current quarter, it beat by 90 million if I remembered correctly. All metrics except the end-of-life gaming consoles are positive, be it Q on Q, or Y on Y.

    Remember a couple of weeks ago, the usual suspect Morgan Stanley wrote a hit piece stating AMD cancelled some capacity at TSMC due to reduced demand, which was promptly absorbed by nvidia? Source: AMD stock falls on cautious comments at Morgan Stanley By Investing.com it caused a big drop in stock price for days after the report was out.

    We got the facts now. Last night, Lisa Su said the company will still face supply constraints for AI products going into 2025. In other words, AMD cannot make enough of AI products to meet demand. No way it could have cancelled capacity. Normally, Morgan Stanley comes up with hit pieces near to result release date, which is the quiet period for companies ie companies do not make announcements unless they affect results substantially.

    1 or 2 mths ago, I read that Blackrock (2nd largest owner of AMD common stock) was buying more AMD. Source: BlackRock Loads Up on AMD and Alphabet Shares

    It is not wise to bet against Blackrock. It can influence even the regulators. When Blackrock wanted bitcoin ETF, it got bitcoin ETF, even when SEC chair Gary Gensler was against crypto & Elizabeth Warren leading an army to fight crypto.

    Lastly, we are entering a seasonally strong period for stocks. My opinion is that there is no compelling reason to sell if you already own the stock. Last year, during end of Oct, AMD was around $80+. In a short 3 mths, it shot up to over $200. This is a heavily shorted stock. Shorts cause the stock price to drop more than expected & stay depressed. Conversely, short covering will make the stock price over-shoot to the upside. So, let's see what happens this round.

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