The share price of AMC Entertainment (NYSE: AMC) is on a bullish run, at one point gaining over 8% on Monday after the company reported impressive Q2 earnings.
At the close of the session, AMC was valued at $3.03, up 3.41%, while over the past week, the equity has rallied more than 4%. However, due to various headwinds, AMC remains in the red in 2025, down almost 25% year-to-date.
The stock received a boost as investors reacted positively to earnings showing that AMC generated $1.40 billion in revenue, up roughly 35.6% year-over-year and beating Wall Street estimates. Earnings per share broke even, a notable improvement from the loss expected by analysts.
For the quarter, attendance surged 25.6% year-over-year to 63 million guests, while net cash from operating activities reached $138.4 million, marking a $173 million improvement from the prior year. Free cash flow rose to $89 million, up $168 million.
Despite the operational progress, AMC remains weighed down by a heavy debt load and a history of cash flow challenges.
Therefore, it’s key to note that one strong quarter does not erase these structural risks, which are reflected in AMC’s YTD performance. Indeed, the current momentum is not guaranteed to be sustainable, as the stock has a history of sharp reversals after rallies.
AI’s verdicts on AMC stock fate
With these fundamentals in mind, Finbold consulted OpenAI’s ChatGPT to determine if the equity is worth buying or selling in the short term.
According to the AI, the ideal move is to hold the stock with caution. The reasoning is twofold, where first, the latest quarter points to genuine business recovery rather than just meme-stock hype; second, the underlying financial risks mean upside potential remains limited in the near term.
For investors who bought at lower levels, ChatGPT noted that the current rally offers a strategic opportunity to secure profits before potential volatility sets in. Long-term investors may still justify holding, provided they believe in AMC’s ability to deliver multiple strong quarters and significantly reduce debt.
For those considering a new position, patience could pay off, with the AI suggesting a more attractive entry point in the $2.50 to $2.70 range.
ChatGPT concluded that AMC’s next big test will be whether it can sustain these earnings improvements over several quarters while reducing debt, a challenge that will determine whether this rally has lasting power or becomes another short-lived spike.
Featured image via Shutterstock
