Key Highlights

  • AMD shares were trading up 4.04% at $485.71 from a prior close of $466.84.
  • Consensus calls for about $13.1 billion in Revenue and EPS near $1.94.
  • AMD guided third-quarter revenue to about $13 billion, plus or minus $300 million.

Advanced Micro Devices (NASDAQ:AMD) was trading up 4.04% at $485.71 in today's regular session, a gain of $18.87 from the prior close of $466.84, as chip stocks recover from a sharp selloff ahead of its third-quarter report after the close. Before today the stock had lost nearly 20% over three sessions after Intel (NASDAQ:INTC) issued a weak PC outlook last week that weighed on CPU peers. It sits about 29% below its October 6 record of $658.52 and has fallen more than 26% over the past month.

What Consensus and Guidance Look Like

Consensus calls for adjusted EPS of about $1.94 to $1.95, against $1.20 a year ago, on revenue of roughly $13.09 billion to $13.10 billion, against $9.25 billion a year ago, which would be growth of 42%. AMD guided revenue to about $13 billion, plus or minus $300 million. Options imply a move of roughly 7% to 10% after the report.

AMD has beaten revenue estimates for 15 straight quarters and EPS estimates for four. In the second quarter revenue was a record $11.54 billion, up 50% year over year, and non-GAAP EPS was $1.66 against a $1.62 consensus. Data Center segment revenue rose 107% to $6.7 billion in that quarter, and third-quarter estimates run about $8.2 billion to $8.3 billion. Client revenue is expected near $3.0 billion and Gaming is expected to decline.

Fourth-Quarter Guidance, MI450 and Helios Ramp in Focus

Investors will look to fourth-quarter guidance against a consensus of about $16.15 billion to $16.29 billion, along with the MI450 and Helios rack-scale ramp and gross Margin against the roughly 56% guide. The CFO has noted that the MI450 ramp weighs slightly on margins. Management has guided to acceleration in the second half, with server CPU revenue expected to grow more than 80%.

Supportive items include a bullish pre-earnings note from Lynx on Venice server CPUs and a report that Samsung's Taylor fab will produce HBM base dies for AMD. NVIDIA (NASDAQ:NVDA) and the semiconductor group are also advancing. The stock has a forward price-to-earnings ratio of 35.25, a trailing ratio of 124.76, trailing Earnings of $5.76 per share and a 52-week range of $188.22 to $658.52.

Tonight's Report and the Fourth-Quarter Outlook Are the Next Markers

AMD is trading higher into its third-quarter report after a three-session decline. The next items to follow are the results and guidance after the close, the data center growth rate, and the margin effect of the MI450 and Helios ramp.