Profit Pregame

This Top Semiconductor Firm Just Made Another Huge Move

Last week was a big one for Advanced Micro Devices, Inc. (AMD).

On Thursday, reports began surfacing that the European Commission had not raised any objections to the $35 billion merger between AMD and fellow chipmaker Xilinx, Inc. (XLNX).

That would mean one more hurdle in closing the deal later this year has been cleared. And while the merger would still need Chinese antitrust approval before being allowed, AMD shares gained more than 5.5% following the news.

But AMD wasn’t done yet.

On Thursday, Alphabet Inc. (GOOGL) subsidiary Google Cloud that it had selected AMD’s third-generation microchip to support its cloud computing services.

This is a massive deal for AMD, as Google Cloud is among the top cloud computing services companies in the world – and one of the largest purchasers of data center chips.

A few well-know names – including Snap Inc. (SNAP) and Twitter, Inc. (TWTR) – are said to already be testing the new AMD-based services.

While the deal with Google cloud is likely a huge catalyst for AMD to continue scooping up even more market share, AMD’s stock price is still trading roughly 13.5% lower than the all-time high it achieved in December 2020.

That may be due to investors’ hesitance to jump into the semiconductor space that has experienced a slew of supply issues this year.

As such, this may be a great buying opportunity on AMD before traders start piling in.

Trading tip of the week

Trading around earnings is always complicated.

To simplify things, I don’t concern myself with what the top or bottom line is. All I care about is where the stock is going.

That is why I always look at historical volatility and implied volatility. That matters more than what the company reports, and gives us a clearer picture of what a stock is likely to do.

Earnings report to watch

Accenture plc (ACN) provides operations services and outsourcing services worldwide. Their clientele includes huge names like Adobe, Alibaba, Google, Microsoft, and many, many more.

All eyes will be on CAN’s earnings report this Thursday as a bellwether for economic recovery. With it’s hands in so many different industries, a strong performance would be a good indicator that economies around the globe are on the mend.

And analyst are expecting an earnings beat as estimates have been increasing lately for Accenture.

Keep an eye on this report on Thursday. A strong result would be a bullish signal for the broader market.

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