Amd is set to report its third-quarter results on Tuesday after the US market closes, following a steep drop in its stock price alongside Intel. According to The Next Web, investors are demanding a massive beat and a bold forecast to calm growing market anxiety over hardware spending.
Key takeaways
- Amd shares dropped about 17% over two days ahead of the third-quarter financial report.
- Analysts project a 41% increase in revenue alongside a 92% jump in earnings.
- Meta is testing Amd Helios AI racks and serves as the chipmaker's second-largest customer.
- Market sentiment remains nervous due to massive tech spending eating into cash reserves.
What to expect from the Amd earnings report?
The upcoming financial update arrives after a rough stretch for the company on the stock market. Amd shares tumbled 10% on Friday and fell another 7.5% on Monday. This downward slide followed a weak outlook from Intel, which suffered its worst single-day drop since at least 1982. Even with these recent losses, Amd remains up more than 120% for the year.
Despite the recent sell-off, professional forecasters expect strong numbers. Amd previously guided for roughly $13 billion in sales following a record second quarter. Analysts polled expect third-quarter earnings to surge by 92% driven by that 41% revenue growth.
How do AI spending fears impact the market?
Wall Street is growing nervous about the massive amounts of money tech giants are pouring into infrastructure. Major spenders like Alphabet and Meta have faced punishment when capital expenditures eat into cash reserves. This dynamic sparks worry that a spending pullback could soon hurt chipmakers. Jim Worden of the Wealth Consulting Group told Bloomberg that he sold his shares because he is not comfortable with the current valuation.
On the positive side, processors remain a bright spot for the business. Amd's chief technology officer noted in July that AI agents rely heavily on CPUs. Also, the success of Meta's Muse agents prompted some analysts to raise their targets. Meta acts as Amd's second-largest customer, and testing of Helios AI racks is currently underway there.
Why it matters
The stakes are high because market patience for heavy infrastructure spending is wearing thin. As Neville Javeri of Allspring Global Investments told Bloomberg, a modest report will not cut it for investors who want proof that the current momentum can continue. If Amd fails to deliver a strong forecast alongside its actual numbers, it risks repeating the fate of Intel and deepening the broader tech sell-off.
Frequently asked questions
Amd reports its third-quarter results on Tuesday after the United States market closes.
Amd shares fell about 17% over a two-day period, dropping 10% on Friday and another 7.5% on Monday.
Analysts expect Amd to report a 41% rise in revenue alongside a 92% jump in earnings.
Meta is Amd second-largest customer, and the company is currently testing Amd Helios AI racks.
Investors fear that heavy spending by major companies like Alphabet and Meta will eat into cash reserves and lead to a spending pullback that hurts chipmakers.
Based on reporting by The Next Web. Read the original article
