Tom Suozzi Bought a Low in AMD Stock

Chip stocks are having a difficult year. iShares Semiconductor ETF (SOXX:US), the popular index for tracking the U.S. chip sector, is down about 31% year-to-date (YTD). The ETF hit a 2-year low in October when it slipped below $300 for the first time since September 2020.

The sharp selloff in chip stocks was initiated by higher interest rates before the downturn has been fueled by the slowing demand. Furthermore, stricter U.S. sanctions on chip exports to China didn’t help the overall risk sentiment for the chip sector.

AMD shares slipped to the lowest levels seen since summer of 2020 in early October. It was disclosed yesterday that the dip in AMD stock was picked up by regular stock trader Tom Suozzi, who invested between $15,000 - $50,000 in the U.S. chipmaker. The trade was made on October 11, when shares closed at $57.63. Less than 2 months later, shares trade more than 30% higher, reflecting an improving risk sentiment in the market.

On November 01, AMD announced an increase of 29% year-over-year (YoY) in revenue, which was reported at $5.6 billion. The gross margin came in at 50% with the net income of $1.1 billion. On a non-GAAP basis, earnings per share (EPS) was reported at $0.67.

Overall, results were lower-than-expected when compared to analyst consensus. 

“Third quarter results came in below our expectations due to the softening PC market and substantial inventory reduction actions across the PC supply chain," said AMD Chair and CEO Dr. Lisa Su.

Despite the recent bounce, AMD stock is still down almost 50% YTD.