Morgan Stanley analyst Joseph Moore said he expects the company to have a strong data center quarter.
- According to Fiscal.ai, AMD is expected to report adjusted earnings per share (EPS) of $1.17 and revenue of $8.75 billion for the third quarter.
- Moore said the focus will be on next year’s rack-scale MI450 and does not expect meaningful near-term upside for GPUs.
- AMD’s stock has gained 115% year-to-date.
Advanced Micro Devices, Inc.’s (AMD) stock fell over 2% in Tuesday’s early premarket session, with the negativity toward the tech space spilling over to the chipmaker. The company’s quarterly results, due after the market closes, are viewed by market participants as another indicator of the health of artificial intelligence (AI) spending.
AMD’s stock, however, has gained 115% year-to-date (YTD).
What Analysts Expect For AMD’s Q3
According to Fiscal.ai, AMD is expected to report adjusted earnings per share (EPS) of $1.17 and revenue of $8.75 billion for the third quarter of the fiscal year 2025. The Santa Clara, California-based company had guided to revenue of $8.7 billion, plus or minus $300 million, when it released its second-quarter results in early August.
AMD clarified that the guidance did not include any revenue from the sales of its China-specific MI308 AI chips to the country, amid the export ban imposed by the U.S. The company also flagged a gross margin of 54% for the quarter.
In a note released on Monday, Morgan Stanley analyst Joseph Moore said he expects the company to have a strong data center quarter, given strong server demand and rival Intel’s constraints. The analyst expects GPU sales to be fairly ok, but he does not expect any near-term upside.
The focus will be on next year’s rack-scale MI450, Moore said. “Given the rally, we need very strong outcomes from MI450 to be bullish from here, which remains a show-me situation.”
Moore has an ‘Equal-weight’ on AMD shares and a $246 price target.
AMD announced a strategic, multi-year, multi-generational partnership with OpenAI in early October, which enables the Sam Altman-led startup to deploy six gigawatts (GW) of AMD GPUs. At that time, AMD CEO Lisa Su said the partnership would deliver tens of billions of dollars in revenue for AMD.
What Retail Feels About AMD Stock Ahead Of Q3
On Stocktwits, retail sentiment toward AMD stock remained ‘bearish’ as of early Tuesday, and the message volume also stayed at ‘low’ levels.
A retail watcher said they braced for a “sell-the-news” event on Tuesday.
Another user said the company might have spent/invested too much money without any return on investment (ROI) like Meta and Microsoft.
The average analysts’ price target for AMD stock is $246.01, according to Koyfin, implying over 5% downside from Monday’s close.
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