Advanced Micro Devices, Inc. (NASDAQ:AMD) shares have run up sharply in January as sell-side analysts touted the company as an AI play which will likely give Nvidia Corp. (NASDAQ:NVDA) a run for its money. Expectations are lofty, heading into the earnings day of the Lisa Su-led company.
AMD’s fourth-quarter earnings report is scheduled to be released Tuesday after the market closes.
The stock gained 20.6% in January as traders bid up the stock in response to analysts raising estimates and stock price targets. Will the company live up to the hype? Is there scope for further upside for the stock as it trades at overbought levels?
Key Q4 Expectations
| Q4’23 Consensus* | Q4’23 Guidance | Q4’22 | Q3’23 | |
| Revenue | $6.12B | $6.1B +/- $300 M | $5.6B | $5.8B |
| Non-GAAP EPS | 77 cents | N/A | 69 cents | 70 cents |
| Non-GAAP gross margin | N/A | 55.1% | 51% | 51% |
* according to Benzinga Pro data
KeyBanc Capital Markets semiconductor analyst John Vinh said in a note that he expects higher results for the fourth quarter, premised on strong server demand.
Peer Intel Corp.’s (NASDAQ:INTC) shares slumped about 12% Friday after the chipmaker reported fourth-quarter revenue that came in slightly shy of estimates and issued below-consensus guidance.
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Segments’ Outlook: AMD’s four main business segments are the Client business, comprising primarily PC processor revenue, the Data Center business, which derives revenue from server processor sales, Gaming, comprising gaming processors and semi-custom products, and the Embedded segment, which caters to commercial and industrial customers.
The revenue share of each of these segments was over 20% in the third quarter.
KeyBanc’s Vinh said he expects improving Genoa processor demand despite weakness in traditional servers. Genoa is AMD’s fourth-generation EPYC server and data center processor based on the Zen 4 microarchitecture.
Intel’s Data Center and AI segment revenue fell 10% year-over-year in the fourth quarter.
Vinh noted that AMD’s MI300X AI accelerator chips were seeing positive inflection in customer traction.
The analyst flagged potential weakness in the Client segment even as peer Intel reported 33% growth in its Client Computing revenue.
Data released by IDC showed that global PC shipments fell 2.7% year-over-year in the…
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