AMD likely to reach Q3 expectations on rising data center, AI: Oppenheimer

Advanced Micro Devices (NASDAQ:AMD) is expected to release its third quarter financial results in two weeks, which should continue to demonstrate solid growth in its data center segment, according to Oppenheimer.

Oppenheimer expects data center revenue to increase 21% quarter over quarter for Q3 and 114% year over year, according to its model.

“Management has impressively grown AMD’s AI franchise from nil to ~$4B over just the past year,” said Oppenheimer analysts, led by Rick Schafer. “Unfortunately, investor expectations have consistently remained out of reach. Initial expectations for ~$8B MI300 sales earlier this year are now closer to $5B, based on our discussions.”

Oppenheimer maintains a Perform rating on AMD.

“We remain cautious toward AMD’s ability to deliver a profitable long-term business model as the second horse in the secularly declining PC market,” Schafer added. “We see financially and technologically stronger Nvidia (NVDA) and market-leading Intel (INTC) strengthening their positions in both CPU and GPU, challenging AMD’s revenue and GM trajectory.”

However, Seeking Alpha analyst, The Asian Investor, finds that a shortage in Nvidia’s Blackwell GPU could benefit AMD.

“AMD announced a new AI accelerator, set to launch in Q1 ’25, that is meant to directly challenge Nvidia’s Blackwell GPU chip,” The Asian Investor said in an analysis on Monday. “Nvidia faces a massive catalyst moment in the fourth quarter, which is when the chipmaker is set to release its much-anticipated Blackwell GPU, its latest Data Center chip. Ironically, Blackwell’s GPU being sold out already could boost sales for AMD’s own AI accelerator, while any shortages are set to benefit AMD and Nvidia’s GPU pricing.”

AMD is expected to release its third quarter financial results on Oct. 29. A consensus of analysts calls for adjusted earnings per share of $0.92 on revenue of $6.71B.