AMD – Daily Chart
The price of AMD has rallied from an August low and a recent sell-off has seen a weak four day bounce. Upside resistance is at $175 with $150 being a key support.
AMD will have something to prove to investors with its shares only increasing 7.5% year-to-date, in comparison to the 22% increase in the S&P 500 index.
The chipmaker is expected to show an increase in its data centre and client computing segments once more, however there are challenges in its gaming segment.
Data centres are now accounting for 50% of the company’s revenue and investors will need to see continued growth in a sector that has been turned upside down by the explosive growth at Nvidia and the emergence of artificial intelligence chips.
Management revenue expectations have been set at $6.7 billion for Q3 which would be an increase of 16% year-on-year, but also up 15% over the last quarter. That will be a key number to follow in this release. Earnings per share are expected to come in at $0.92, marking a rise of 31% y-o-y.
Data centre revenue of $2.8 billion in Q2 was up 115% over the same period last year and that was driven by higher sales for the company’s MI300 GPU chips. AI demand is expected to drive further demand for the next generation EPYC chips in this third quarter release.
The slowdown in gaming was a steep -59% over the last year and AMD expects sales to weaken further. However, AI demand for data centre infrastructure should outweigh any weakness once again.