AMD shares saw a decline of 3.7% as the market closed, preceding the company’s earnings announcement slated for later this evening. The downturn is part of a broader sell-off impacting semiconductor and AI trade stocks. Today’s financial shuffle resulted in the Nasdaq decreasing by 2.04%, with other sectors such as Financials, Healthcare, and Consumer Staples faring better. Despite these developments, AMD’s upcoming earnings report holds significant interest for investors, as it aligns with ongoing trends in AI infrastructure investments.
Why Did AMD’s Stock Drop?
The decrease in AMD’s share value is not isolated to the company but rather a part of a wider market movement affecting semiconductor stocks. Palantir and NVIDIA also experienced similar declines, with Palantir falling 8% after its earnings release and NVIDIA down by nearly 4%. Broadcom (NASDAQ:AVGO) joined this trend with a close to 3% drop. Despite these declines, sectors outside of technology witnessed gains, showcasing a shift towards less risky investments for the day.
What Are the Expectations for AMD’s Earnings?
AMD’s earnings report is highly anticipated, with the market predicting a positive outcome. Polymarket estimates a 90% probability of AMD exceeding earnings expectations. This season, major tech companies have faced either significant earnings expectations or surprises with mixed outcomes, as seen with Meta (NASDAQ:META)’s recent performance. AMD is expected to present solid figures, with Wall Street predicting growth, especially in the data-center GPU and CPU sectors, despite existing export hurdles and market adjustments.
Past reports on AMD showed an emphasis on its growing presence in AI and data center markets. The firm has been actively scaling its GPU and CPU businesses, supported by positive trends in AI infrastructure demand. AMD’s Q3 guidance highlighted a projected revenue increase due to strong EPYC CPU demand and MI355 shipments, suggesting a robust performance similar to previous quarters. These developments indicate a possible continuation of AMD’s momentum.
Advanced Micro Devices (AMD) is set to report its third-quarter earnings, with estimates showing expected revenue of around $8.75 billion and EPS of $1.17. Analysts suggest a 28% revenue growth by 2026, driven by high-margin AI products and server CPUs. Investors are particularly keen on AMD’s data center advancements and MI355 adoption, reflecting its competitive positioning against rivals like NVIDIA.
CEO Lisa Su and CFO Jean Hu have underlined their strategic focus areas, including data center AI ramp-ups and gross margin improvements. AMD’s expanded customer base and cloud instance launches further solidify its market outlook, indicating potential progress towards company goals despite industry volatility.
Future prospects for AMD depend heavily on its performance in the AI and semiconductor sectors. As AI infrastructure continues to evolve, AMD’s ability to navigate export licensing issues, such as those affecting MI308 GPU shipments to China, will play a crucial role in its financial results. Investors are watching for updates that could influence deferred sales, potentially reinvigorating revenue streams if regulatory conditions change.
