Signals · theoretical, educational setups
AMD and Arista After the Beat, Nasdaq on Election Morning
Three theoretical setups for Wednesday, November 4: AMD and Arista after forecasts well above expectations, and the Nasdaq-100 after overnight futures fell on a Democratic sweep of Congress.
AMD · Advanced Micro Devices, Inc. — Bullish, Short-term (days). AMD reported third-quarter revenue of $13.4 billion, up 45%, adjusted earnings of $2.09 a share against $1.95 expected, and data-center revenue up 97% to $8.5 billion, then guided fourth-quarter revenue to about $17 billion against $16.2 billion expected. The shares had already risen 3.7% to $483.90 in Tuesday's session and traded about 5% to 7% higher after hours, and were still about 5% up on overnight markets after the election results knocked Nasdaq-100 futures lower. A guide that large usually draws upgrades and estimate revisions over several sessions, which can support a stock even on a weak tape. The setup is that the post-earnings gap holds; a daily close below $483.90, Tuesday's close, would invalidate the setup, since it would mean the market had erased the entire reaction to the report.
ANET · Arista Networks, Inc. — Bullish, Short-term (days). Arista beat on its third quarter, with revenue of $3.66 billion, up 58.5%, and adjusted earnings of $1.20 a share against $1.08, and guided fourth-quarter revenue to $3.9 billion to $4.0 billion against $3.60 billion expected by LSEG. The stock closed up 3.52% at $169.91 and rose about 12% after hours. The risk is the same one that hit Tokyo's AI suppliers on Wednesday: fears that a Democratic Congress brings tighter rules for data centres. Arista's guidance reflects orders already in the pipeline, so the setup is that the report outweighs the political headline over the next few days. A daily close below $169.91 would invalidate the setup, because it would mean the gap from the results had fully closed.
QQQ · Invesco QQQ Trust (Nasdaq-100) — Neutral, Short-term (days). Nasdaq-100 futures fell as much as 2.2% overnight as Democrats were projected to win both the House and the Senate, then recovered to about 0.6% lower by 12:38 a.m. Eastern time; the 10-year Treasury yield fell about 5 basis points to 4.90%. In the regular session on Tuesday the Nasdaq Composite had risen 0.83% to 25,372.01. Two forces now pull in opposite directions: strong AI-hardware earnings from AMD, Arista and Supermicro, and the fear that new oversight slows data-centre spending, which sent the Nikkei down 3.56% by Wednesday's midday break. With the October jobs report due on Friday, the overnight low and Tuesday's close frame the range; a neutral stance fits until the cash session shows which side traders keep.