Chip giant AMD (AMD) will report its first-quarter results after the bell on Tuesday. The announcement follows competitor Intel’s disappointing report last week. While Intel (INTC) outperformed on both revenue and profit, the company gave lower-than-expected revenue guidance for the current quarter, causing shares to fall.
Investors and analysts will look at two key metrics in the AMD report: AI chip sales and PC market performance. The company launched its MI300 series of AI accelerators in December 2023 and began shipping units shortly thereafter. How well these chips sell could have a big impact on AMD stock following the earnings release.
Wall Street expects earnings per share (EPS) of $0.61 on revenue of $5.45 billion. That would be a slight increase from the same quarter last year, when AMD reported earnings per share of $0.60 on revenue of $5.35 billion.
AMD’s MI300 chips are designed to compete with Nvidia’s (NVDA) best-selling H100 accelerator series. The company previously said its MI300X outperforms Nvidia’s chips, a claim Nvidia denied. Intel is also chasing Nvidia’s H100 platform with its Gaudi 3 accelerators.
However, Nvidia announced its successor to the H100, the Blackwell platform, during its GTC conference in March. This platform should offer better performance than its predecessor.
The AI arms race isn’t going to slow down any time soon either. Microsoft (MSFT), Google (GOOG, GOOGL) and Meta (META) each announced they are investing money in AI data center capabilities to expand and support their various software offerings.
But it remains to be seen whether AMD can steal significant market share from market leader Nvidia. MI300X sales are expected to generate billions this year, according to Timothy Arcuri, an analyst at UBS Global Research.
“For MI300 sales this year, we still think $5 billion to $6 billion is conservative and the forecasts are also OK,” he wrote in an investor note ahead of the results.
For the quarter, Wall Street expects data center revenue of $2.31 billion, which would represent a 78% increase from the same period last year.
Outside of AI sales, Wall Street will be keeping an eye on the PC market recovery and its impact on AMD’s sales. According to IDC, global PC shipments rose 1.5% in the first quarter of 2024, marking the first quarter of growth after two years of declines.
Intel already reported a 31% year-over-year increase in revenue from its Client Group, the company’s PC chip segment, last quarter. That should be a good sign for AMD. Both companies are pushing their own AI PCs, or laptops and desktops, that can run generative AI apps locally instead of over the web.
Analysts expect AMD customer revenue, the segment that includes sales of PC chips, to rise 74% year over year to $1.29 billion.
But Intel and AMD aren’t the only companies pushing for a share of the AI PC market. Qualcomm (QCOM) is aiming for its own lead with its new Snapdragon X Elite and Snapdragon X Plus chips for laptops.
Despite healthy growth forecasts for the data center and customer segments, Wall Street expects the company’s gaming and embedded divisions to decline by 45% and 40%, respectively.
Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.
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