AMD's Q4 Earnings Preview: AI Chip Demand and Market Challenges in Focus

AMD Reports Q4 Earnings This Week: What's Going On With The Chip Stock? - Advanced Micro Devices (NASDAQ:AMD)

The chipmaker is expected to report fourth-quarter earnings of $1.08 per share and revenue of $7.53 billion. Advanced Micro Devices Inc AMD shares are experiencing some weakness Monday ahead of earnings this week. Here's a look at what you need to know. What To Know: AMD is set to report fourth-quarter financial results after the market close on Tuesday. The chipmaker is expected to report earnings of $1.08 per share and revenue of $7.53 billion, according to estimates from Benzinga Pro. AMD shares are facing some selling pressure on Monday alongside broader markets after U.S. President Donald Trump signed executive orders on Saturday to impose 25% tariffs on Canada and Mexico and 10% tariffs on China, which are expected to take effect on Tuesday. AMD shares have trended lower in recent months as the U.S. has ramped up restrictions on AI chip exports due to national security concerns. AMD stock is down about 19% since the company last reported earnings. In a new note to clients on Monday, Northland Capital analyst Gus Richard brushed off AI demand concerns and noted that the biggest cloud service providers (CSPs) are not adjusting their spending plans. "We believe more GPU capacity will be needed as more computing is required for post-training and RLM Interference. The risk is that enhanced export controls will impact the flow of AI chips into China," Richard said. "It is important to note that only the AI chips need to be smuggled. China has access to chips and the capability to build an AI cluster. They only need to smuggle in the GPUs." Check This Out: Nvidia On DeepSeek Success, Alibaba Unveils Advanced AI Model And More: This Week In Artificial Intelligence Several AI-related names sold off last week as investors weighed the potential for Chinese startup DeepSeek to disrupt America's AI lead. The company reportedly developed its open-source LLM in a couple of months at a much lower cost than competitors. Richard also flagged recent rumors that Microsoft Corp MSFT has grown frustrated with AMD. The Northland Capital analyst noted that the frustration is likely related to the company's open-source software, which is not as well developed as Nvidia Corp's NVDA Cuda. "However, DeepSeek has just demonstrated the power of an open-source model. CSPs buy product road maps, and AMD has proven that it can take on an entrenched competitor and win in the server market. We think CSPs have good visibility in AMD's product roadmap and are confident in their ability to execute," Richard said. The Northland Capital analyst has an Outperform rating on AMD shares with a price target of $175. AMD Price Action: AMD shares were down 1.67% at $114.01 at the time of publication Monday, according to Benzinga Pro. Read Next: Palantir CEO Alex Karp Sounds Alarm on China's Deepseek - Could This Threaten Palantir's AI Dominance? Photo: courtesy of AMD. AMDAdvanced Micro Devices Inc$113.98-1.70%Overview Rating:Speculative37.5%Technicals Analysis660100Financials Analysis200100WatchlistOverviewMSFTMicrosoft Corp$411.18-0.94%NVDANVIDIA Corp$116.45-3.01%Market News and Data brought to you by Benzinga APIs

What Analysts Think of AMD Stock Ahead of Earnings

Advanced Micro Devices (AMD) is set to report its fourth-quarter results after the market closes Tuesday, with analysts projecting revenue and earnings growth on strong demand for AI chips. AMD is expected to report revenue of $7.54 billion, up 22% year-over-year, and earnings of $1.1 billion, or 67 cents per share, up from $667 million, or 41 cents per share, a year earlier. Of the 14 analysts covering the stock tracked by Visible Alpha, eight have issued a "buy" or equivalent rating, compared with five "hold" ratings, and one "sell." Their consensus price target is $164, about 43% above Monday's intraday price of $114.50. Shares have taken a hit, losing over a third of their value in the past 12 months amid concerns about the chipmaker's outlook and ability to compete with Nvidia's (NVDA) offerings. However, in notes to clients last week, Bank of America and Raymond James analysts suggested competition in the AI space from Chinese firms like DeepSeek, which rocked markets last week with its claims of a sophisticated, cost-efficient AI model, could push U.S. tech firms to spend even more on AI, to the benefit of chipmakers like AMD.