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What You Need To Know Ahead of AMD’s Earnings Report

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Key Takeaways

  • Advanced Micro Devices (AMD) is set to report earnings for the first quarter of 2024 on Tuesday after the closing bell.
  • Analysts expect the chipmaker to report that revenue and earnings increased from the year-ago period.
  • AMD will report revenue for its data center segment, which could show that sales of artificial intelligence (AI) chips offset seasonal declines.
  • AMD could also offer investors additional insights on how the company might benefit from the AI boom as tech giants including Meta Platforms, Alphabet, and Microsoft, expect to increase spending to invest in AI infrastructure.

Advanced Micro Devices (AMD) is set to report first-quarter earnings after the bell on Tuesday, with investors likely to monitor the chipmaker’s data center segment and the impacts of demand for artificial intelligence (AI).

Analysts project AMD’s revenue to be $5.46 billion for the first quarter of 2024, down from the previous quarter, but higher than the same period in 2023, according to estimates compiled by Visible Alpha.

AMD is expected to report net income of $333.23 million or 20 cents per share, down from $667 million or 41 cents a share in the fourth quarter, but up from a loss of $139 million or 9 cents per share in the same period the year before.

Analyst Estimates for Q1 2024 Q4 2023 Q1 2023
Revenue $5.46 billion $6.17 billion $5.35 billion
(Diluted) Earnings / (Loss) Per Share 20 cents 41 cents (9 cents)
Net Income / (Loss) $333.23 million $667 million ($139 million)

Key Metrics: Data Center Segment

AMD will report its data center segment revenue as investors watch for ways in which AI chips could help offset seasonal weakness in server sales.

The segment “primarily includes server microprocessors (CPUs), graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), Smart Network Interface Cards (SmartNICs), Artificial Intelligence (AI) accelerators and Adaptive System-on-Chip (SoC) products for data centers,” the company said in a Securities and Exchange Commission (SEC) filling.

Analysts project that AMD will report data center revenue at $2.32 billion for the first quarter, according to consensus estimates compiled by Visible Alpha, an increase from the $1.3 billion reported from the segment in the year-ago period.

Raymond James analysts said they expect “flattish q/q Data Center revenue in 1Q24 as MI300 growth should offset seasonal weakness in non-AI servers.” AMD launched the MI300, an AI chip, at the end of 2023 with the product expected to ramp in 2024.

Business Spotlight: AI Impact as Tech Giants Increase Spending

AMD, like other chipmakers, has seen gains amid the AI boom. The company could provide investors with additional insights on Tuesday into how AMD expects to benefit after tech giants Meta Platforms (META), Google parent Alphabet (GOOGL), and Microsoft (MSFT) said they expect to increase expenditures to further invest in AI infrastructure.

Bank of America (BofA) analysts wrote they “remain bullish on vendors serving the cloud infra market,” highlighting AMD alongside Nvidia (NVDA), Broadcom (AVGO), Marvell Technology (MRVL), and Micron Technology (MU) as their “top 5 AI beneficiaries.”

“The upfront AI buildout cycle could last at-least 3-4 years (CY23-27E), with most favorable (chip) stock upside potential during the first three (CY23-25) years, followed by benefits moving towards other enterprise verticals taking advantage of AI’s productivity gains,” they said.

AMD shares were up close to 2% at $160.50 around 1:45 p.m. ET Monday, contributing to the stock’s nearly 9% year-to-date gain.

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