AMD Just Crushed Earnings
How we got paid to bet on it.
Looks Like The Hedge Funds Were Wrong
On Sunday, Zero Hedge shared a note from Goldman Sachs:
Hedge Funds Aren’t Buying This Meltup... Just A Matter Of Time Until We Get A Flush
In response, I wrote,
Hedge funds might have to start chasing after this week's AI stack earnings.
Judging by the price action in Advanced Micro Devices (AMD 0.00%↑) in the premarket—up nearly 19% as I type this—the hedge funds may have started to chase. The stock is spiking because AMD crushed earnings after the close yesterday.
AMD Crushes Earnings
Revenue came in at $10.3 billion, up 38% year over year. Adjusted earnings were $1.37 per share. Data-center revenue rose 57%, and AMD guided for second-quarter revenue of about $11.2 billion—well ahead of expectations.
AMD Breaks $400 Per Share
After closing at $355.26 yesterday, AMD is trading at over $400 now. That matters because back on December 12th, when my subscribers and I placed our trade on AMD, the stock was trading around $210.
The idea that AMD could hit $400 within the next several months seemed like a stretch then. This was a mega-cap stock, after all. And yet we placed a trade that would max out if AMD nearly doubled by June.
The reason we used a $400 target, was because that the potential return Portfolio Armor’s Top Names system estimated for AMD at the time. So we structured a trade that gave us a shot at that kind of upside, while keeping our risk defined.
Actually, we did better than that.
We got paid to take the shot.
The Trade
This was the structure we used then:
The stock is Advanced Micro Devices (AMD 17.65%↑), and our trade is a combo consisting of these four legs:
Buying the $380 strike call expiring on June 18, 2026,
Selling the $400 strike call expiring on June 18, 2026,
Selling the $200 strike put expiring on February 20, 2026, and
Buying the $195 strike put expiring on February 20, 2026,
For a minimum net credit of $0.40. The max gain on 1 contract is $2,040, the max loss is $460, and the break even is with AMD at $199.60. This trade filled at a net credit of $0.60.
In plain English, we were getting paid to make a defined-risk bet that AMD could make a huge AI-infrastructure catch-up move.
At the time, I described it this way:
Essentially, we are betting that AMD holds above $200 for two months in exchange for a free ticket to ride the stock to $400 over the next 6 months.
That’s exactly what we wanted from the structure.
If AMD stayed above $200 through February, the short put spread would expire or become cheap enough to close, and we’d still own the June $380/$400 call spread. The upside was capped at $20 wide, but since we entered the full package for a credit, that call spread was effectively a lottery ticket we were paid to buy.
In February, we exited the put spread at a net debit of $0.20.
That left us in this situation: we got paid $40 per contract (our initial $0.60 - the $0.20 we paid to exit the put spread x 100) for a lottery ticket worth up to $2,000 (The $20 call spread width x 100).
It Looked Even Less Likely In March
If AMD hitting $400 by June seemed aggressive in December, it looked even less likely during Operation Epic Fury in late March.
The market was whipsawing. War risk was dominating headlines. Semiconductor and AI infrastructure names were under pressure along with everything else.
But we still liked the thesis enough to place another, more conservative AMD trade on March 24th in our Whipsaw Market alert.
That one wasn’t the same kind of lottery ticket. It was a more conservative structure designed for a rougher tape:
The stock is Advanced Micro Devices (AMD 18.94%↑), and our trade is a combo consisting of these four legs:
Buying the September 18th, 2026 $220 call,
Selling the September 18th, 2026 $230 call,
Selling the May 8th, 2026 $180 put, and
Buying the May 8th, 2026 $175 put,
For a max net debit of $2.45. The max gain on 1 contract is $740, and the max loss is $745. This trade filled at $2.45.
We ended up exiting that second AMD trade for a profit less than a month later.
4-leg combo on Advanced Micro Devices (AMD 19.60%↑). Entered at a net debit of $2.45 on 3/31/2026; exited the put spread at a net debit of $0.20 on 4/13/2026, and exited the call spread at $8.00 on 4/24/2026. Profit: 218% (return on max risk: 72%).
That’s an important point: the first AMD trade was the long-shot catch-up trade. The second was a more tactical structure placed during a volatile market. Same broad thesis, different structure for different conditions.
Then AMD Delivered
Tuesday’s earnings report was the catalyst the original trade needed.
AMD didn’t just beat. It reinforced the AI infrastructure thesis behind the trade.
The data-center business was the key. Revenue there rose 57% year over year, driven by demand for EPYC server processors and Instinct GPUs. CEO Lisa Su pointed to rising AI infrastructure demand, and AMD guided Q2 revenue well above consensus.
That was the thesis back in December: the market was still too focused on one dominant AI GPU name, and AMD had room to catch up.
AMD didn’t need to become Nvidia. It just needed to rerate enough for the trade to work.
Not Just A One-Off
We’ve already cashed in on a few other AI stack trades this week:
4-leg combo on Seagate Technology (STX 0.00%↑). Entered at a net debit of $4.40 on 3/13/2026; exited the put spread at a net debit of $0.20 on 4/14/2026; exited the call spread at a net credit of $16.00 on 5/5/2026. Profit: 259% (return on max risk: 121%). Signal: PA Top Names.
4-leg combo on Western Digital (WDC 0.00%↑). Entered at a net credit of $3.30 on 2/13/2026; exited the put spread at a net debit of $0.20 on 4/14/2026; exited the call spread at a net credit of $8.00 on 5/5/2026. Profit: 336% (return on max risk: 166%). Signal: Market Watchers.
4-leg combo on Micron Technology (MU 0.00%↑). Entered at a net debit of $2.62 on 3/3/2026; exited the put spread at a net debit of $0.20 on 4/8/2026; exited the call spread at a net credit of $16.00 on 5/5/2026. Profit: 504% (return on max risk: 173%). Signal: PA Top Names.
This Is A Repeatable Process
This is the kind of trade we’re trying to find over and over:
A strong theme.
A stock our system likes.
A structure where the risk is defined.
A financing leg that helps us get paid, or nearly paid, to take the shot.
And an exit plan that keeps us from turning a win into a regret.
AMD’s earnings may have looked like a sudden breakout, but the trade itself wasn’t improvised. It was a rules-based bet on AI infrastructure catch-up, structured so that if AMD merely avoided disaster in the short run, we’d still have a shot at a much bigger move later.
Now, that lottery ticket is about to pay off.
And we’re planning to buy a few more lottery tickets later today.