AMD (AMD) will report its third-quarter results after the bell on Tuesday, giving Wall Street a glimpse of demand for AI chips as the market continues to digest a sharp selloff in the AI trade and a disappointing outlook from rival Intel (INTC) last week.
Intel reported better-than-expected third-quarter results after the bell Thursday, but provided fourth-quarter revenue estimates of between $15 billion and $16 billion, well below analyst projections of $17 billion.
The news sent Intel stocks fall nearly 29%.
The company blamed the outlook on a deeper-than-expected decline in the PC market.
The industry faces two overlapping factors: tough comparisons with last year, when Microsoft ended support for Windows 10, forcing businesses to buy newer Windows 11 systems, and steadily rising PC prices, which are eating into demand.
Even though AMD generates the majority of its revenue through data center sales, a decline in PC demand would still hurt its bottom line.
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For the third quarter, analysts expect AMD to report earnings per share of $1.97 on revenue of $13 billion, according to Bloomberg consensus estimates. The company reported EPS and revenue of $1.20 billion and $9.2 billion, respectively, during the same period last year.
AMD’s Data Center business is expected to bring in revenue of $8.19 billion, an 88% increase from the $4.34 billion reported last year.
Last month, the company announced its Helion Reference Design, a server rack designed to be equipped with various AMD CPU and GPU configurations according to customer needs.
Revenue from the company’s Client business, which includes PC sales, is expected to reach $3.06 billion, up 11% year-over-year but flat sequentially.
AMD’s gaming business could take a hit, however, with Wall Street forecasting a 49% drop in revenue to $655 million.
The company’s gaming division includes products ranging from graphics cards for PCs to custom silicon for game consoles. Both categories face higher prices due to ongoing memory and storage shortages, depressing customer demand.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on @DanielHowleyor contact Signal or Telegram.
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