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Advanced Micro Devices Inc. is due to report third-quarter results Tuesday afternoon, but investors likely are looking far beyond the latest quarter.
Artificial intelligence continues to rule the day in the semiconductor industry, but for AMD
AMD,
AI is more of a 2024 story. In the meantime, Rosenblatt Securities analyst Hans Mosesmann expects the company to post an in-line third quarter, reflecting strength in the data center that helps offset weakness in areas like enterprise and PC gaming.
“We expect AMD to strike a bullish posture in all strategic product areas including the new MI300A/X APU/GPU compute accelerators which we see as being much more competitive than [Wall] Street believes,” he wrote, referring to accelerated processing units and graphics processing units.
Here’s what else to look out for in AMD’s report.
What to expect
Earnings: Analysts tracked by FactSet expect AMD to post 68 cents a share in adjusted earnings, up a smidge from 67 cents a share a year before.
Revenue: The FactSet consensus calls for $5.7 billion in third-quarter revenue, nearly flat with the year-prior total of $5.6 billion.
Stock movement: AMD shares have fallen after four of the company’s past five earnings reports, including the most recent one, when they dropped 7% in the session immediately following the results. The stock is up 50% so far this year, while the S&P 500
SPX
has increased 9%.
See also: Wolfspeed’s stock rallies as company notches smaller loss than expected
What analysts are saying
- “We expect slight upside to [third-quarter results] and [a] largely in-line-with-consensus [fourth-quarter] outlook. We believe PC tracked slightly better and data center tracked in line. We are modeling $300-400 [million] contribution from MI300 GPU in [the fourth quarter], primarily from El Capitan supercomputer, which is a one-time project.” — Raymond James analyst Srini Pajjuri
- “AMD’s [calendar third-quarter] estimates should be achievable, particularly assuming some benefit from improving consumer PC shipments. The risk rather, in our view, is CQ4 (and perhaps CQ1). The ramp of El Capitan should provide AMD some momentum; however, we are less clear that AMD can hit elevated expectations, which we believe will eventually require better server CPU shipments in light of continued weakness in [cloud-service-provider] spend.” — Wedbush analyst Matt Bryson
- “The AMD narrative feels all about their datacenter (and, particularly, their AI story) right now. In the near term the achievability of their [second-half] datacenter growth (guided to 50% half over half) will be the question (we think the growth into year-end is plausible as most of it is likely from El Capitan but Q1 estimates may bear some watching), though CPU share as Genoa finally hit crossover will also be top of mind.” — Bernstein analyst Stacy Rasgon
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