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Advanced Micro's Mixed Earnings Results Add Fuel To Direxion's AMD-Focused Bull And Bear Funds
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Advanced Micro's Mixed Earnings Results Add Fuel To Direxion's AMD-Focused Bull And Bear Funds
Aug 11, 2025 5:01 AM

Amid growing concerns about economic stability and the implementation of President Donald Trump's trade tariffs, investors have been anxious this earnings season. Case in point is semiconductor giant Advanced Micro Devices Inc. ( AMD ) , which recently disclosed a mixed performance for its financial disclosure. Initially, the results sent AMD stock plunging during the midweek session before a recovery in the following day.

For the second quarter, Advanced Micro posted $7.69 billion in revenue, beating Wall Street analysts' consensus target of $7.41 billion. In addition, this tally represented a 32% lift against the year-ago quarter's print. Those optimistic about AMD stock would have noticed the revenue breakdown by segment, which was generally pointed in the positive direction.

Data Center: $3.2 billion, up 14% year-over-year

Client and Gaming: $3.6 billion, up 69% year-over-year

Embedded: $824 million, down 4% year-over-year

Further, the company revealed that non-GAAP gross margin landed at 43% in the quarter. Notably, management stated that the federal government's export controls on its AMD Instinct MI308 GPUs led to approximately $800 million in inventory and related charges. Without these line items, gross margin would have jumped to 54%.

"We delivered strong revenue growth in the second quarter, led by record server and PC processor sales," said Lisa Su, chair and CEO of Advanced Micro.

Still, not everything aligned with investor expectations. On the bottom line, the semiconductor firm posted adjusted earnings of 48 cents per share. This figure missed the consensus view of 49 cents per share. Conspicuously, the last time AMD missed earnings was in November 2022 (which was also when the tech giant missed on the top line as well).

It's possible, based on analysts' commentary, that the initial volatility that AMD stock suffered following the Q2 disclosure could have stemmed from a combination of elevated expectations and a rich premium. Since the start of the year, AMD gained nearly 43%. Given the prior strong performance, investors may have wanted an outstanding print — a result the company couldn't quite deliver.

The Direxion ETFs: Still, AMD stock managed to gain roughly 6% in the following session on Thursday, demonstrating the bimodal nature of the sentiment race. Such a robust ecosystem organically lays the foundation for Direxion's specialized exchange-traded funds.

For the optimists, the Direxion Daily AMD Bull 2X Shares ( AMUU ) may be appealing. This ETF seeks the daily investment results, before fees and expenses, of 200% of the performance of AMD stock. On the other end, pessimists may find the Direxion Daily AMD Bear 1X Shares ( AMDD ) aligned with their interests, which tracks 100% of the inverse performance of the namesake equity.

A key attribute underlying Direxion ETFs is convenience. Usually, traders interested in leveraged or short positions must resort to the options market. However, financial derivatives carry complexities that may not be suitable for all market participants. In contrast, Direxion ETFs can be bought and sold much like any other publicly traded security, thus reducing the learning curve.

Still, prospective participants must be cognizant of these funds' unique risk profile. First, leveraged and inverse ETFs typically incur greater volatility than funds tracking benchmark indices, such as the Nasdaq Composite index. Second, Direxion ETFs are designed for exposure lasting no longer than one day. Holding these ETFs longer than recommended may expose investors to value decay due to the daily compounding effect.

The AMUU ETF: Since the start of the year, the AMUU ETF has gained just over 91%, enhancing the return witnessed in the namesake equity.

Although the upside can be impressive, any volatility that AMD stock experiences can be greatly exacerbated in the AMUU ETF.

Right now, while the bull fund is firmly above its 50-day moving average, it temporarily dropped below its 20-day exponential moving average in the Wednesday session after earnings.

The AMDD ETF: With the tech ecosystem still apparently in recovery mode, the AMDD ETF has found itself down 45% on a year-to-date basis.

Despite the massive outpouring of red ink, the bears appear to be supporting AMDD. In the trailing five sessions, the inverse fund is down only 2%.

While the AMDD ETF is below both its 20-day EMA and 50 DMA, the Aug. 5 and Aug. 6 sessions saw heavy accumulative volume.

Featured image by Chris from Pixabay.

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