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Advanced Micro Devices (NASDAQ:AMD) stock is stuck in a bear market as investors dump companies in the artificial intelligence (AI) industry. It fell to $504 on Friday, 23.58% below its all-time high, with its market cap dropping to $824 billion from over $1.06 trillion in October. Will its upcoming earnings help turn the tide?

Advanced Micro Devices to Publish Earnings Amid Circular Investing Concerns

AMD will publish its financial results as investors remain concerned about several factors. One of these challenges is the circular nature of its investments. While Nvidia (NASDAQ:NVDA) is the best-known name in circular investments, AMD has done the same.

The most recent one was its participation in Meta Platforms (NASDAQ:META) financing. It is investing $1 billion in the company, with Meta expected to use some of the proceeds to buy AMD’s CPUs, GPUs, and networking systems. Meta is already one of the biggest buyers of AMD’s products.

AMD has also invested in Anthropic, the biggest AI lab in the world. It committed to investing $5 billion in Anthropic. Anthropic already uses AMD’s solutions to train its AI models.

AMD stock has also slumped as investors have dumped companies in the GPU industry. Last week, Intel (NASDAQ:INTC) had its worst daily performance ever after its earnings report disappointed. Nvidia has also dropped by double digits from its all-time high.

It is against this backdrop that AMD will publish its quarterly earnings report. Based on the recent earnings reports by top companies in the AI industry like Micron, SanDisk, Samsung Electronics, and Samsung, chances are that AMD will publish strong earnings.

Benzinga data shows that analysts expect AMD’s September quarter revenue to jump 41% to $13 billion. Earnings per share are expected to rise to $1.94 from $1.20 in the same quarter last year. Most of this growth will be driven by its AI business, including GPUs and CPUs.

AMD Stock is at Risk of Falling After Earnings

Recent history shows that most AI companies have fallen after releasing their earnings, including Intel, Micron, and SanDisk. This suggests investors have set a high bar for results and are still concerned about the AI bubble.

The options market points to an AMD stock retreat after its earnings. It has a put/call open interest ratio of 1.03, a sign that it has more puts than calls. Most of the puts are at $490, about 3% below the current level.

On the charts, AMD has been in a slow downward trend in the past few weeks, moving from a high of $660 in October to the current $504. It made a brief pullback, reaching a high of $577 last week, and then it dropped.

The stock has dropped below the 23.6% Fibonacci Retracement level. It has slumped below the 50-day moving average, while the Supertrend indicator has turned red. Therefore, the stock will likely drop further, potentially to the 50% retracement level of $421, down by 16.25% from the current level.