Amd earnings outlook

AMD's earnings outlook for the third quarter of 2024 appears positive, driven by several key factors: 1. **Strong Revenue Growth**: AMD is expected to report revenues of $6.73 billion for the quarter, reflecting a substantial year-over-year increase of 16% compared to the previous year. This growth is attributed to increased demand for AI infrastructure and server CPUs. 2. **Earnings Per Share (EPS) Growth**: The EPS is anticipated to be approximately $0.92 per share, which is slightly above consensus estimates and represents a 30% year-over-year increase. This indicates a strong profitability trend for the company. 3. **AI Infrastructure Demand**: The surge in AI infrastructure spending across industries is a significant growth driver for AMD. Goldman Sachs analyst Toshiya Hari highlighted this factor, noting sustained growth in AI infrastructure spending as a key factor in his positive outlook on AMD. 4. **Server CPU Market Gain**: AMD is poised to benefit from the cyclical recovery in demand for server CPUs. Following a downturn in the server market, there is a rebounding demand for traditional Server CPUs, which is expected to contribute to AMD's revenue outgrowth and improved gross margins. 5. **GPU Sales Expansion**: The expansion of AMD's GPU sales is expected to be driven by the surge in demand for AI-related workloads. This growth in GPU sales, combined with the company's new AI chip launches, such as the Instinct MI325X, positions AMD well for increased market share and revenue. 6. **Long-Term Growth Potential**: AMD's long-term AI accelerator market forecast has been raised to $500 billion by 2028, up from the previous forecast of $400 billion by 2027. This indicates a robust growth trajectory for the company's AI-related products. In summary, AMD's earnings outlook for the third quarter of 2024 is optimistic, with expected revenue growth, EPS growth, and a positive market sentiment driven by the AI infrastructure demand, server CPU market gain, and GPU sales expansion.