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Semiconductor Companies Prepare for Quarterly Results

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Semiconductor companies are bracing themselves as they gear up to report their earnings for the quarter. However, Advanced Micro Devices Inc. (AMD) may face some challenges when it comes to meeting the high expectations set by investors.

According to Wells Fargo analyst Aaron Rakers, the consensus outlook for AMD’s third quarter appears to be overly optimistic. As a result, he has adopted a more cautious approach in anticipating their earnings.

Rakers predicts that AMD will generate $5.4 billion in revenue and achieve 60 cents in adjusted earnings per share for the third quarter. These figures will be disclosed when AMD addresses its investors next. In comparison, the FactSet consensus view expects $5.9 billion in revenue and 74 cents in adjusted EPS.

It is Rakers’ belief that the latter half of AMD’s year will be more fruitful, with a heavier focus on the fourth quarter. During this period, the company is expected to benefit from the full realization of the EPYC Genoa + Bergamo product cycle, as well as the launch of MI300 early in Q4.

Rakers maintains an overweight rating and sets a target price of $150 for AMD shares.

Prospects for Nvidia Remain Strong

In related industry news, experts predict that Nvidia will continue to dominate the AI-chip market, potentially capturing up to 90% of market share. AMD, however, is not far behind and poses a genuine threat to Nvidia’s position.

Intel Corp. Expected to Experience Positive Sentiment in Second Half of the Year

Intel Corp. is expected to face “incrementally positive sentiment” as it looks ahead to the second half of the year, according to industry experts. The company is scheduled to report its results after the close of trading on July 27.

While acknowledging that competitive dynamics, beyond just AMD, are often overlooked, experts suggest that Intel’s five-node/four-year roadmap execution may prove successful. This belief creates a more positive risk-reward setup for investors, particularly those with a multi-year perspective.

Experts question whether Wall Street truly understands the potential for Intel to realize gross-margin benefits. It is speculated that the company could experience an acceleration in the tailwinds it receives from equipment-depreciation trends.

As Intel offers insight into its roadmap execution, it is anticipated that the company will provide a net-consistent/positive update. This update is crucial as it remains the key driver of investor sentiment.

Despite the optimistic outlook for Intel’s second-half performance, experts maintain an equal weight rating for the stock with a target price of $32.

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