AMD (AMD) will report its third-quarter results after the bell on Tuesday, which will be a gauge of the health of the artificial intelligence market. AI continues to drive up the stock prices of tech giants, from AMD rival Nvidia (NVDA) to customers like Microsoft (MSFT), with investors and analysts hoping their big bets will pay off. There is.
AMD’s financial results come as the company announced details of three upcoming chips, including the 5th generation AMD EPYC central processing unit (CPU) for servers, the Instinct MI325X AI chip, and the Ryzen AI Pro 300 for AI PCs for enterprise users. It was announced less than a month after.
The company’s stock has risen 65% over the past 12 months, outpacing the broader S&P 500 (GSPC), which has risen 36%, and dwarfing struggling Intel (INTC), whose stock price has fallen a staggering 34%. NVIDIA, on the other hand, continues to grow rapidly, rising an astonishing 246% last year.
AMD is Nvidia’s biggest rival in the AI chip space. Of course, this doesn’t mean much since Nvidia is estimated to have 75% to 90% of the market.
Based on Bloomberg analyst consensus estimates, AMD is expected to post adjusted earnings of $0.92 per share and revenue of $6.7 billion in the current quarter. This was up from $0.70 per share and $5.8 billion in the same period last year.
AMD’s most important data center business unit is expected to generate revenue of $3.46 billion, up from $1.59 billion in the third quarter of 2023. Analysts are expecting $1.39 billion in AI/GPU revenue alone.
The company’s second-largest segment, its client business, involves sales of CPUs for desktops and laptops, and is expected to generate $1.71 billion in revenue, compared to $1.45 billion last year. However, AMD’s gaming division is expected to decline significantly.
Analysts expect the business to post revenue of $572 million in the quarter. This represents a decrease of nearly $1 billion compared to the same period last year.
The gaming division includes sales of AMD’s Radeon graphics cards for laptops and desktops and custom chips for consoles such as Xbox and PlayStation.
Sales of graphics cards for gaming PCs and consoles are down from their peak during the pandemic. The pandemic has had consumers buying up devices to fill their days and nights stuck at home and on the couch.
AMD’s earnings report will give investors and analysts an idea of what to expect when NVIDIA releases its results on November 20th.
Email Daniel Howley at dhowley@yahoofinance.com. Follow @DanielHowley on Twitter.
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