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What Awaits Advanced Micro Devices (AMD) in Q4 Earnings?

Advanced Micro Devices AMD is set to release its fourth-quarter 2022 results on Jan 31.

The company expects fourth-quarter revenues to be $5.5 billion (+/-$300 million), which indicates year-over-year growth of 14%, flat sequentially.

The Zacks Consensus Estimate for revenues is pegged at $5.51 billion, suggesting growth of 14.22% from the year-ago quarter’s reported figure.

The consensus estimate for fourth-quarter earnings is pegged at 66 cents per share, down a penny over the past 30 days. The figure indicates a decline of 28.26% on a year-over-year basis.

AMD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing once, the earnings surprise being 12.20%, on average.

Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. Price and EPS Surprise
Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote


Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

AMD’s fourth-quarter top-line growth is expected to have suffered from lower client segment revenues due to reduced processor shipments resulting from weak PC demand.

Moreover, AMD’s results are expected to reflect the negative impacts of a challenging macroeconomic situation globally, rising interest rates, geopolitical tensions in Europe and the impact of COVID in China.

Per Gartner’s latest report, global PC shipments totaled 65.3 million units in the fourth quarter of 2022, down 28.5% year over year.

AMD’s closest peer, Intel’s INTC fourth-quarter 2022 results also suffered from weak PC demand. Client Computing Group revenues were $6.6 billion, down 36% year over year.

AMD is now expected to provide a weaker first-quarter guidance, given the challenging macroeconomic trends for the first half of 2023, as observed by Intel in its latest fourth-quarter conference call.

In the past year, AMD has outperformed Intel. While AMD shares have lost 34%, Intel shares have dropped 42.3%.

Nevertheless, AMD’s results are expected to have benefited from the continued adoption of EPYC processors. Additionally, the demand for Genoa CPUs is expected to have remained strong, along with Xilinx’s FPGA and networking products, as well as Pensando DPUs.

Key Q4 Developments

During the to-be-reported quarter, AMD unveiled new graphics cards built on the next-generation high-performance, energy-efficient RDNA architecture.

AMD also launched fourth-generation EPYC processors built on the Zen 4 core in the to-be-reported quarter.

What Our Model Says

Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

Although AMD has an Earnings ESP of +1.36%, it currently has a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Juniper JNPR has an Earnings ESP of +1.89% and a Zacks Rank of 3, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Juniper shares have declined 8% in the past year. JNPR is set to report its fourth-quarter 2022 results on Jan 31.

Perion Network PERI has an Earnings ESP of +13.40% and a Zacks Rank #3.

Perion shares are up 62.1% in the past year. PERI is set to report its fourth-quarter 2022 results on Feb 8.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Intel Corporation (INTC) : Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

Juniper Networks, Inc. (JNPR) : Free Stock Analysis Report

Perion Network Ltd (PERI) : Free Stock Analysis Report

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