Will AMD surprise with its results after today's session? 🔎

Advanced Micro Devices (AMD.US) is preparing to announce its third-quarter results after the close of today's session, October 31st. On the day of the earnings release, the company is slightly losing, similar to the longer term, which has been in a downtrend since mid-2023. Can we expect a change in this trend after the results?

Market Expectations

The semiconductor giant from Santa Clara, California, is expected to post a net profit per share of $0.68 with revenues of $5.69 billion, reflecting a modest increase of 2.2%. The forecasts themselves are somewhat disappointing, as in the broader market where AMD is present, we can see an improvement in sales of personal computers and AI chips, in which AMD is increasingly seen as a key player. Moreover, the company's forecasts for the last quarter of this year, which in the face of challenges including in the area of data centers, may turn out to be worse than the current consensus. These main risks at the moment may turn out to be catalysts for further declines after the quarterly results. However, let's not be so pessimistic and look at some hard data.

Expected Earnings Summary:

• Revenue: expected $5.7 billion
  • Data Center Revenue: expected $1.62 billion
  • Gaming Revenue: expected $1.53 billion
• Adjusted EPS: expected 68 cents
• Adjusted Gross Margin: expected 51
• R&D Expenses: expected $1.45 billion
• Q4 Revenue Forecast: expected $6.4 billion

Long-term Prospects for AMD Still Positive?

The company's shares have been under selling pressure for some time. Nevertheless, looking at the company in the long term, the prospects still seem very promising. In focus are, among others, AMD's strategic investments and product innovations, especially in areas competitive with Nvidia (NVDA) - in the AI chip market. The demand for AMD's MI300 processors, due to their contribution to the development of Arm-based systems for PCs, are among the key factors that can influence the company's market share growth, and thus future revenue streams. Despite significant estimate downgrades in recent months, analysts remain optimistically inclined towards the company's long-term prospects. The company's shares have recorded an impressive increase of 52% since the beginning of the year. This optimism is further confirmed by new shareholders in the company, such as Cathie Wood's Ark Invest, signaling faith in AMD's long-term growth trajectory.

AMD (AMD.US) has been in a downtrend since the middle of this year. Currently, the stock price is heading towards the lower boundary of this channel. If the report surprises the market positively, we might see an attempt to test the resistance at the level of 101 USD. Otherwise, the current momentum may only be halted at the next support zone around 88-89 USD. Source xStation 5.