AMD’s earnings report for the first quarter of 2018 is highly anticipated, especially after Intel’s disappointing earnings report last week. While Intel beat expectations in terms of revenue, its guidance for the current quarter fell short, causing a decline in its stock.
When AMD releases its earnings report, analysts and investors will be closely watching two key metrics: sales of AI chips and the performance of the PC market. The company introduced its MI300 AI accelerators in December 2023, and units started shipping shortly after. The success of these chips will likely impact AMD’s stock performance.
Wall Street expects AMD to report earnings per share (EPS) of $0.61 on revenue of $5.45 billion. Compared to the same quarter last year, this would be a slight increase from earnings of $0.60 on $5.35 billion. It will be interesting to see if AMD can maintain this positive trend.
One of AMD’s main competitors in the AI chip market is Nvidia, whose H100 accelerators are best-sellers. However, AMD claims that its MI300X chip outperforms Nvidia’s chips. Intel is also working on accelerators for its Gaudi 3 platform to compete with Nvidia. The AI market is highly competitive, and companies are constantly striving to develop superior products.
In March, Nvidia announced the Blackwell platform during its GTC conference. This platform is expected to offer improved performance compared to its predecessor, the H100. The AI arms race shows no signs of slowing down, as both Google and Meta recently announced investments in AI data center capabilities.
While AMD has high hopes for its MI300X sales this year, it remains to be seen if it can capture significant market share from Nvidia. UBS Global Research analyst Timothy Arcuri believes that MI300 revenue could generate billions of dollars this year, but he considers $5 billion to $6 billion to be a conservative estimate.
Aside from AI sales, the recovery of the PC market will also play a significant role in AMD’s sales. After experiencing two consecutive quarters of decline, global PC shipments grew by 1.5% in the first quarter of 2024. Intel’s Client Group revenue, which manufactures PC chips, saw a 31% year-over-year increase in the latest quarter. This positive development bodes well for AMD, as both companies offer AI PCs.
In conclusion, AMD’s upcoming earnings report will shed light on the sales performance of its AI chips and the impact of the recovering PC market. The competition with Nvidia and Intel remains fierce in the AI chip market, but AMD has high hopes for its MI300X chips. Wall Street expects positive results, and analysts are optimistic about the company’s revenue potential. The AI arms race shows no signs of slowing down, with major players like Google and Meta investing in AI capabilities. Overall, the future looks promising for AMD, but it will need to continue innovating and delivering superior products to stay ahead in this ever-evolving market.