AMD’s Q1 Earnings Are Expected To Beat Wall Street Expectations

(CTN News) – In the first quarter of 2018, AMD (AMD) will report its earnings after the bell on Tuesday. Last week, Intel released a disappointing earnings report.

Despite beating expectations on the top and bottom lines, Intel’s (INTC) revenue guidance for the current quarter was lower than expected, which caused its stock to decline.

Analysts and investors will pay close attention to two key metrics in AMD’s report: sales of AI chips and the performance of the PC market. MI300 AI accelerators were released by the company in December 2023, and units began shipping shortly thereafter. AMD’s shares may be affected by how well those chips are selling following the announcement of its earnings.

It is expected that Wall Street will report earnings per share (EPS) of $0.61 on revenue of $5.45 billion. Compared to AMD’s earnings of $0.60 on $5.35 billion in the same quarter last year, this would be a slight increase.

Nvidia’s (NVDA) best-selling H100 accelerators will go head-to-head with AMD’s MI300 chips.

According to the company, its MI300X chip outperforms Nvidia’s chips. Similarly, Intel is developing accelerators for its Gaudi 3 platform to compete with Nvidia’s H100 platform.

During its GTC conference in March, Nvidia announced the Blackwell platform, which is the follow-up to the H100. As compared to its predecessor, this platform should offer improved performance.

AI’s arms race is also not likely to slow down any time soon. Google (GOOG, GOOGL) and Meta (META) each announced that they are investing in AI data center capabilities to expand and support their various software products.

Whether AMD is able to take significant market share away from Nvidia remains to be seen. The MI300X sales this year are expected to generate billions of dollars, according to UBS Global Research analyst Timothy Arcuri.

“We still consider $5 billion to $6 billion to be conservative for MI300 revenue this year, and we see guidance as being adequate,” he wrote in an investor note.

Wall Street anticipates Data Center revenue for the quarter to be $2.31 billion, which represents a 78% increase over the same period last year.

In addition to AI sales, Wall Street will closely monitor the recovery of the PC market and its impact upon AMD’s sales. Global PC shipments grew 1.5% in the first quarter of 2024, marking the first quarter of growth after two consecutive quarters of decline.

Intel’s Client Group revenue, which manufactures PC chips, increased by 31% year-over-year in the latest quarter. This should be a positive development for AMD. AI PCs, or laptops and desktops that run generative AI apps locally rather than online, are offered by both companies.

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