Market observers want to see two crucial figures in AMD's report: sales of AI chips and the state of the PC market. AMD's MI300 series of AI accelerators was launched in December 2023, and shipments began soon after. The success of these chips could significantly influence AMD's stock price post-earnings announcement.
Expectations from Wall Street peg the earnings per share (EPS) at €0.56 ($0.61) with revenues around €5.02 billion ($5.45 billion). This would represent a modest uptick from the corresponding quarter of the previous year, where AMD reported an EPS of €0.55 ($0.60) on revenues of €4.93 billion ($5.35 billion).
As expected, AMD has claimed superiority of its MI300X over Nvidia's offerings, a contention Nvidia disputes. Intel is pursuing Nvidia's H100 series with its Gaudi 3 accelerators. Meanwhile, at its GTC conference in March, Nvidia unveiled its successor to the H100, the Blackwell platform, promising enhanced performance over its predecessor.
The competition in AI technology is showing no signs of abating. Tech giants like Microsoft, Google, and Meta announced significant investments in AI data centre capabilities to support and expand their software services.
Yet, it remains to be seen if AMD can carve out a substantial market share from Nvidia, the current leader. UBS Global Research analyst Timothy Arcuri suggests that sales of the MI300X could generate billions in revenue this year.
"We still very much see €4.61 billion to €5.53 billion ($5-$6 billion) as still conservative for MI300 revenue this year, and we also see guidance being fine," he noted in a pre-earnings investor memo.
For this quarter, analysts anticipate Data Centre revenue to hit €2.13 billion ($2.31 billion), marking a 78 per cent surge year over year.
Additionally, the PC market's recovery is scrutinised for its potential impact on AMD's performance. IDC reports a 1.5 per cent growth in global PC shipments for the first quarter of 2024, a positive change after two years of contraction.
Analysts predict a 74 per cent year-over-year leap in AMD's Client revenue, the segment encompassing PC chip sales, to approximately €1.19 billion (around $1.29 billion) for the quarter.
However, AMD and Intel are not alone in vying for the AI PC market share. Qualcomm has its new Snapdragon X Elite and Snapdragon X Plus laptop chips.
Despite optimistic forecasts for its Data Centre and Client divisions, analysts expect AMD's Gaming and Embedded sectors to experience declines of 45 percent and 40 percent, respectively.