AMD Surges 5.78% on TSMC Earnings and Wells Fargo Upgrade: Is This the Start of a New Bull Run?

Summary
• AMD shares jumped 5.78% to $229.76, hitting an intraday high of $238.35
• TSMC’s Q4 earnings beat and Wells Fargo’s 'top pick' upgrade drove the rally
• AMD’s PEG ratio of 2.6 highlights valuation concerns despite strong cash flow

Advanced Micro Devices (AMD) is surging on a perfect storm of catalysts: TSMC’s blockbuster earnings, a bold Wells Fargo upgrade, and a strategic AI partnership with Tata Consultancy Services. The stock’s 5.78% intraday gain reflects a mix of optimism and caution, as investors weigh robust demand for AI chips against a lofty valuation. With the semiconductor sector rallying broadly, AMD’s move underscores its pivotal role in the AI-driven compute revolution.

TSMC Earnings and Wells Fargo Upgrade Ignite AMD Rally
AMD’s sharp rally stems from two pivotal catalysts: TSMC’s Q4 earnings and Wells Fargo’s bullish upgrade. TSMC, AMD’s key manufacturing partner, reported $2.98 EPS on $32.7B revenue, far exceeding estimates, and signaled sustained demand for advanced process technologies. Simultaneously, Wells Fargo analyst Aaron Rakers upgraded AMD to 'top pick,' projecting a 55% price rise this year and $20 EPS by 2029. These developments validate AMD’s leadership in AI-driven data center growth, with Rakers emphasizing insatiable demand for its GPU portfolio. The stock’s 5.78% gain reflects investor confidence in these fundamentals, despite a PEG ratio of 2.6 and a 117x trailing P/E.

Semiconductor Sector Rally Amplifies AMD’s Momentum
The semiconductor sector surged alongside AMD, led by TSMC’s 6.93% gain and NVDA’s 2.29% rise. AMD outperformed the sector, driven by its AI-focused narrative and strategic partnerships like the TCS collaboration. While NVDA remains the sector leader, AMD’s rally highlights its unique positioning in enterprise AI adoption. The VanEck Semiconductor ETF (XLF) rose 3.5%, reflecting broad-based optimism. AMD’s outperformance underscores its role in industrializing AI solutions, contrasting with peers focused on consumer or cloud applications.

Options and ETFs for Capitalizing on AMD’s Momentum
• MACD: -0.808 (bullish divergence), RSI: 58.3 (neutral), 200D MA: $167.42 (far below)
• Bollinger Bands: Price at $229.76 (above upper band of $227.03), signaling overbought conditions
• 30D/200D support/resistance: $214.93–$215.44 and $160.10–$163.83
AMD’s technicals suggest a continuation of its bullish trend, with key resistance at $238.35 (intraday high) and support at $227.36 (intraday low). The RSI at 58.3 indicates room for upward momentum, while the MACD histogram’s positive divergence hints at strengthening buying pressure. Traders should monitor the 200D MA as a critical long-term support level. The options chain offers high-leverage opportunities:
• AMD20260123C230: Call option with 44.29% IV, 37.87% leverage ratio, delta 0.4979, theta -0.8513, gamma 0.0250, turnover $6.97M. This contract balances moderate delta with high leverage and liquidity, ideal for a 5% upside scenario (target price $241.25) yielding a $11.25 profit per contract.
• AMD20260123C235: Call option with 44.62% IV, 56.57% leverage ratio, delta 0.3776, theta -0.7192, gamma 0.0237, turnover $6.80M. Its lower delta suits a conservative approach, with a 5% upside (target $241.25) generating a $6.25 profit. High gamma ensures responsiveness to price swings.
Aggressive bulls may consider AMD20260123C230 into a breakout above $238.35, while cautious traders might use AMD20260123C235 for a more controlled position.

Backtest Advanced Micro Devices Stock Performance
AMD has experienced a 3% intraday increase from 2022 to now, and the backtest results show a positive performance. The 3-day win rate is 51.52%, the 10-day win rate is 51.72%, and the 30-day win rate is 52.12%. The maximum return during the backtest period was 7.21%, which occurred on day 58 after the event.

Bullish Setup Confirmed: Position for AMD’s Next Move
AMD’s rally is underpinned by TSMC’s earnings, Wells Fargo’s upgrade, and AI demand, but its 117x P/E and 2.6 PEG ratio suggest caution. The stock’s technicals and options activity indicate a continuation of the bullish trend, with key levels at $238.35 (resistance) and $227.36 (support). Investors should monitor the 200D MA and sector leader NVDA (up 2.29%) for broader market signals. For those seeking leverage, the AMD20260123C230 and AMD20260123C235 options offer high-reward opportunities. Watch for a breakout above $238.35 or a pullback to $227.36 to confirm the next directional move.