AMD to report Q2 earnings as Wall Road seems to AI, PC gross sales progress
AMD (AMD) will report its second quarter outcomes after the bell on Tuesday, giving Wall Road a greater understanding of the AI chip market forward of rival Nvidia’s (NVDA) report later this month.
The corporate stands to learn from the resumption of its chip gross sales in China after the Trump administration briefly banned them in April, in addition to the potential for pull-forward in CPU gross sales as producers constructed up stock to fend off the impression of tariffs on PC gross sales.
AMD shares are up 47% 12 months up to now and 34% during the last 12 months, whereas Nvidia shares are up 33% and 66%, respectively.
AMD inventory rose greater than 1% earlier than the bell on Tuesday.
For the quarter, AMD is predicted to see adjusted earnings per share (EPS) of $0.49 on income of $7.4 billion, in keeping with Bloomberg consensus estimates. That might signify a 29% decline in EPS however a 27% leap in income.
A part of the rationale for that’s that AMD is predicted to take a $700 million hit from the Trump administration’s ban on the sale of the corporate’s MI308 AI chips for China. That’s far decrease than the $4.5 billion write-down Nvidia took in Q1 and the $8 billion it mentioned it might soak up Q2 as a result of impression of the ban by itself China-specific chip.
Trump reversed course on the ban final month, which ought to assist make up for a few of these losses within the coming quarters.
AMD also needs to profit from the launch of its MI350 line of AI chips, designed to go toe-to-toe with Nvidia’s Blackwell-powered chips. In line with AMD, the MI350 line, which incorporates the MI350X and MI355X, affords 4 instances the AI compute efficiency and a 35x enhance in inferencing capabilities versus its predecessors.
“We count on AMD to publish greater outcomes and better steerage, as we see bettering conventional server demand and newest era share beneficial properties, in addition to robust demand for MI355,” KeyBanc Capital Markets analyst John Vinh wrote in an investor be aware forward of the corporate’s earnings.
AMD’s Knowledge Heart section is predicted to herald $3.2 billion within the quarter, up 14% 12 months over 12 months from Q2 2024 when the enterprise generated $2.8 billion.
Past the Knowledge Heart section, AMD’s Shopper enterprise, which incorporates gross sales of CPUs for desktops and laptops, is predicted to see $2.5 billion. That’s an enormous 71% leap versus the $1.4 billion it introduced in throughout the identical quarter final 12 months.
That anticipated enhance is due to the anticipated pull-forward in laptop computer and desktop shipments to fight the Trump administration’s tariffs. However it can additionally harm gross sales within the again half of the 12 months.
“Much like [Intel], we count on AMD Shopper to learn from tariff-related pull-in of demand in Q2, and that very same profit to seemingly reverse in 2H, resulting in below-seasonal Q3/This autumn,” BofA International Analysis analyst Vivek Arya wrote in an investor be aware.