Oct 31, 2023

Advanced Micro Devices will release its latest third-quarter earnings this week, when management commentary could play a big part. 

AMD-–-Weekly-Chart

AMD – Weekly Chart 

AMD stock trades at the key support of $94.36 and will need to hold that to avert a move lower toward $80. 

Rival chip maker Intel’s CEO dismissed the idea that both Nvidia and AMD are preparing to release their Arm-based CPUs for Windows, possibly by 2025.  

“Arm and Windows client alternatives, you know, generally they’ve been relegated to pretty insignificant roles in the PC business,” Pat Gelsinger told investors.  

Gelsinger made the comment when Intel had long been producing processors using the x86 architecture for Windows PCs and Macs. But in 2020, Apple famously dumped the x86 architecture to build its Arm-based chips for the Mac.  

Since then, Arm-based Macs have received rave reviews for their strong performance and long battery life. Intel has lost some dominance in chip manufacturing. Now, AMD is among the companies that could use its Arm chips further to diminish Intel’s control of the Windows PC market.  

Analysts are worried that AMD results could suffer this week as a slow growth environment for PC sales eats into the company’s profit when it delivers after the market closes on Tuesday. 

Market participants in the options market are expecting a swing of 9% in either direction with this report. 

Wall Street sees the California-based chip maker delivering earnings of $0.68 a share, up slightly from $0.67 in the year-ago period. If correct, it would mark AMD’s fifth consecutive quarter of declining earnings year-over-year. PC revenue is expected to increase 2% annually to $5.69 billion, reflecting the softer demand for PC and server chips. With these headwinds, AMD’s management may also be cautious in their forward guidance.

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