What Happened
Advanced Micro Devices (AMD) is scheduled to report its third-quarter financial results after the US market closes on Tuesday, according to Bloomberg as reported by The Next Web. The upcoming report follows a significant decline in AMD's share price, which fell roughly 17 percent over a two-day period alongside Intel.
The Details
Analysts anticipate that AMD's third-quarter earnings will increase by 92 percent, accompanied by a 41 percent rise in revenue. Previously, AMD provided guidance pointing to approximately $13 billion in sales following a record-breaking second quarter.
Market pressure intensified following a weak financial outlook from Intel, which caused Intel shares to suffer their worst day since at least 1982. Reacting to the broader market sentiment, AMD stock dropped 10 percent on Friday and fell an additional 7.5 percent on Monday, though it maintains a gain of more than 120 percent for the year.
Expectations for AMD's performance are tied heavily to its processor offerings. AI agents rely heavily on CPUs, a point highlighted by AMD's chief technology officer in July. Furthermore, some analysts have elevated their targets following the success of Meta's Muse agents. Meta serves as AMD's second-largest customer, and AMD's Helios AI racks are currently undergoing testing at Meta.
The Background
Investor anxiety stems partly from broader market apprehension surrounding artificial intelligence spending. Major technology spenders like Alphabet and Meta have faced market punishment due to capital expenditures impacting their cash reserves, sparking worries that a potential pullback in spending could negatively impact chipmakers. A similar market reaction occurred in July when TSMC shares dropped despite reporting record revenue.
Market participants hold mixed views on the stock's prospects. Neville Javeri, a portfolio manager at Allspring Global Investments—which holds the stock—stated that a modest report would be insufficient. Conversely, Jim Worden of the Wealth Consulting Group expressed discomfort with the valuation and reported selling his AMD shares.