The U.S. stock market has been in a state of turmoil this week, with hurdles being cleared one after another, from soaring oil prices and geopolitical tensions to five of the seven “excellent” earnings results.
Next up is a blockbuster week of Q1 earnings season, with more than 100 S&P 500 members scheduled to report. Highlights include semiconductor leaders advanced micro deviceretail trading favorites Palantir and coinbaseand consumer stocks Uber to Disney.
For momentum traders, AMD’s report after the bell on Tuesday is probably the most important. Semiconductors remain at the center of the bull market as the driving force behind the artificial intelligence boom, with AMD on fire, up 270% over the past year. This is more than triple the NVIDIA move reported on May 20th.
AMD and Palantir
Options traders are bracing for a 7% rally in AMD, with call volume and premiums far outpacing puts, but with an almost even number of calls being sold and bought, the overall trend is bullish. Perhaps that’s because the stock plummeted 17% after its last report before rallying 75% in April.
AMD since the beginning of the year
Information software provider Palantir’s flows look a little more bullish. The stock is down 30% from its all-time high, but is still up 550% in the past two years and has risen in five of the past seven reports.
In Palantir options trading on Friday, call buys exceeded sells, and puts sells exceeded buys. Calls account for 62% of total trading volume and 72% of premium trading. Traders are expecting an 8% change, slightly below the fourth-quarter average of 8.7%. Alex Karp’s company will report after the bell on Monday.
Palantir, YTD
In the same week, AMD and Palantir presented an opportunity for the hardware and software themes to come together after months of underperformance by the latter group. Momentum is certainly in the bulls’ favor, with the S&P 500, Nasdaq 100, and Russell 2000 all hitting new highs on Friday, while the VIX index hit 16.4, its lowest level since February 3.
