Key Takeaways

• Advanced Micro Devices will report third-quarter earnings after the closing bell Tuesday.
• Analysts expect AMD's net income to more than double from a year ago on strong data center revenue.
• Investors will likely be listening for commentary on artificial intelligence expectations after the company's Advancing AI event earlier this month.

Advanced Micro Devices (AMD) will report third-quarter financial results after the closing bell Tuesday, with analysts calling for significant earnings growth.

Analysts expect the chipmaker to report revenue of $6.71 billion, up nearly 16% year-over-year, according to Visible Alpha. Net income is projected to be $815.76 million or 50 cents per share, more than double the $299 million or 18 cents per share AMD posted a year earlier.

Key Metric: Data Center Revenue

In July, AMD reported data center revenue in the second quarter more than doubled year-over-year to a record $2.8 billion, as demand for the company's artificial intelligence (AI) chips surged.

Analysts expect data center revenue to rise to a fresh high of $3.52 billion for the third quarter. CEO Lisa Su said in July that AMD expects to “deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors." 

Business Spotlight: AI Sales Outlook

At the company’s Advancing AI event earlier this month, AMD launched its next generation of AI chips but did not raise its AI sales guidance or announce any new large customers as many investors had hoped. Jefferies analysts suggested investors could be watching for those updates to come with AMD's earnings Tuesday.

Over 80% or 13 of the 16 analysts covering AMD tracked by Visible Alpha have a "buy" or equivalent rating for the stock, with an average price target of $192.13, implying about 23% upside from Friday's closing price of $156.23. Shares of AMD have gained 6% so far in 2024.

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