Advanced Micro Devices AMD shares moved modestly higher Tuesday trading ahead of the chipmaker's first quarter earnings, which are expected after the closing bell.
AMD, which has been touting its AI potential through its leadership position in data center chips, is expected to see its bottom line nudge higher to 68 cents per share, over the three months ending in September, its fiscal first quarter, with revenues rising 2.33% to $5.7 billion.
CEO Lisa Su pegged September quarter revenues in the region of $5.7 billion, plus or minus $300 million, with gross margins of around 51%, when she last spoke with investors in early August.
AMD's near-term outlook will also be in focus after Su noted that the group was on track to ramp up production of its new-generation chips to meet a surge in AI demand, a market she said would grow to around $150 billion by 2027.
The new chips are expected to ship in volumed by the fourth quarter of this year, with reports suggesting Amazon AMZN and Microsoft MSFT could be potential customers.
"Despite modest risk to 4Q guidance given the pushout of MI300A volumes and a more measured Genoa ramp, investors will likely look through any near-term miss in anticipation of a December MI300X launch event and Microsoft onstage endorsement, providing a clear catalyst for the stock into the end of the year," said KeyBanc Capital Markets analyst John Vinh, who carries and 'overweight' rating and a $160 price target on the stock.
Investors will also look for a detailed impact from expanded restrictions on the sale of advanced technologies to China, unveiled earlier this month by U.S. Trade Secretary Gina Raimondo.
The new restrictions, which expand upon new export rules put in place last year, are designed to limit China's access to "advanced semiconductors that could fuel breakthroughs in artificial intelligence and sophisticated computers that are critical to (Chinese) military applications," Raimondo said.
China’s Ministry of Foreign Affairs described those efforts as "economic coercion and sci-tech bullying" earlier this year and described the moves as "against the principles of market economy and fair competition."
AMD shares were marked 2.2% higher in late-day Tuesday trading to change hands at $98.28 each, a move that would lift the stock's six-month gain to around 7%.
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