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

UPDATED – July 26, 2024: This article has been updated to reflect more recent analyst estimates and stock price information.

Key conclusions

Advanced Micro Devices will report second-quarter financial results after the close of trading on Tuesday.
Analysts expect revenues and profits to increase compared to the same period last year.
The chipmaker will report data center revenue, with analysts expecting a new record this quarter.
The company will also provide guidance for the third quarter and may provide updated guidance for full-year data center GPU revenue, which could help boost investor sentiment toward the stock.

Advanced Micro Devices (AMD) is set to report second-quarter earnings after the close on Tuesday, with investors likely expecting record data center growth and solid guidance amid the artificial intelligence (AI) boom.

The chipmaker is expected to post revenue of $5.74 billion, according to estimates from Visible Alpha, which would be a 7% increase from the same period last year. Net income is expected to be $343.08 million, or 21 cents per share, up from the second quarter of 2023.

	Analysts’ estimates for Q2 2024	Q1 2024	Q2 2023
Income	$5.74 billion	$5.47 billion	$5.36 billion
Diluted earnings per share	21 cents	7 cents	2 cents
Net income	343.08 million dollars	$123 million	$27 million

Key Metric: Data Center Growth

AMD to report data center revenue as investors expect demand for AI to continue to grow

AMD’s data center business achieved record revenue of $2.3 billion in the first quarter, up 80% year-over-year, driven by sales of its MI300 AI data center chips.

Analysts expect data center revenue to hit $2.79 billion, according to Visible Alpha consensus estimates, which would be a quarterly record for the segment.

Business in Focus: Outlook and Investor Sentiment Amid AI Boom

AMD will release its third-quarter revenue guidance, and investors will likely be watching closely as sentiment around the company’s stock is less favorable than for many other AI chipmakers.

Investors consider Nvidia (NVDA) and Broadcom (AVGO) to be their favorite semiconductor stocks, while AMD is among the “least popular,” according to Citi analysts who recently met with investors to get their take on the chipmaker’s stocks.

AMD’s third-quarter revenue forecast is expected to be $6.66 billion, according to consensus estimates from Visible Alpha. If AMD’s outlook beats estimates, it could be a positive catalyst for the stock.

Goldman Sachs analysts predict AMD will report third-quarter guidance in line with consensus. Analysts expect the chipmaker to update its data center graphics processor revenue forecast to $4.5 billion from $4.5 billion, which could also improve investor sentiment.

AMD shares have lost about 5% of their value this year, closing Friday at $139.99.