AMD (AMD) will report its fiscal third quarter earnings after the bell on Tuesday, in what will serve as a temperature check on the health of the artificial intelligence market. AI continues to drive shares of tech giants ranging from AMD rival Nvidia (NVDA) to customers like Microsoft (MSFT), and investors and analysts are hoping to see their big bets pay off.
AMD’s earnings come less than a month after the company detailed three of its upcoming chips including its 5th Gen AMD EPYC central processing unit (CPU) for servers, its Instinct MI325X AI chip, and the Ryzen AI Pro 300 for AI PCs for enterprise users.
Shares of the chip company are up 65% in the last 12 months, beating out the broader S&P 500 (GSPC), which is up 36%, and clobbering struggling Intel (INTC), whose stock price is down a staggering 34%. Nvidia, meanwhile, continues to surge, climbing an eye-watering 246% in the last year.
AMD is Nvidia’s biggest rival in the AI chip space. Of course, with Nvidia estimated to have between 75% and 90% of the market, that’s not saying much.
For the quarter, AMD is expected to bring in adjusted earnings per share of $0.92 on revenue of $6.7 billion, based on analyst consensus estimates from Bloomberg. That’s up from $0.70 per share and $5.8 billion in the same quarter last year.
AMD’s data center business segment — its most important — is set to bring in $3.46 billion, up from $1.59 billion in Q3 2023. Analysts are expecting $1.39 billion from its AI/GPU revenue alone.
The company’s second-largest segment, its Client business, which involves sales of CPUs for desktops and laptops, is set to bring in $1.71 billion, versus $1.45 billion last year. AMD’s gaming segment, however, is projected to drop in a big way.
Analysts anticipate the business will bring in $572 million in the quarter. That’s nearly a $1 billion decline from the same period last year.
The gaming segment includes sales of AMD’s Radeon graphics cards for laptops and desktops and custom chips for consoles like the Xbox and PlayStation.
Graphics cards for gaming PCs and console sales have fallen since their peak during the pandemic, which saw consumers buying up devices to help them fill their nights and days when they were stuck inside on the couches.
AMD’s earnings report will give investors and analysts a look at what to expect from Nvidia when it announces its own earnings on Nov. 20.