Advanced Micro Devices Inc. (NASDAQ:AMD) is poised to report its third-quarter earnings on November 7, 2024, amid a backdrop of strong seasonal momentum and increasing optimism about its prospects in the artificial intelligence (AI) sector. With expectations of robust financial performance, AMD’s upcoming earnings could serve as a catalyst for significant market activity.
Analysts anticipate earnings of $1.16 per share on revenues of $8.74 billion, according to median estimates from Benzinga Pro. If realized, this would represent a remarkable 26% increase in earnings per share (EPS) from $0.92 reported a year earlier, and a 28% rise in revenue compared to $6.72 billion in the same quarter last year. This projected growth underscores AMD’s expanding influence in the AI chip market, where its latest accelerators are gaining traction among major enterprise clients.
November: A Strong Month for AMD
Historically, November has been a lucrative month for AMD, which has consistently outperformed the S&P 500 during this period. Over the last decade, the stock has averaged a return of 16.8% in November, finishing higher in eight out of the last ten years. Notably, the month of November 2021 saw a staggering 31.7% increase in share price. Since 1995, AMD has enjoyed an average November gain of 12.07% with a win rate of 67%. Excluding a 4.79% decline in 2024, the company has recorded double-digit gains each November from 2018 through 2023.
The stock has only experienced significant losses greater than 5% five times in the past three decades, with the most severe declines occurring during the bear markets of 2000 and 2008, both dropping 32.6%.
Analyst Optimism Fueled by AI Developments
A key factor driving investor enthusiasm ahead of the earnings report is the growing confidence in AMD’s trajectory within the AI sector. Bank of America analyst Vivek Arya recently revised AMD’s 12-month price target to $300 from $250, indicating a potential 13% upside from current trading levels. Arya noted that AMD now has “greater visibility for the ramp/deployment of MI450 rack ‘Helios’,” particularly following the recent 2025 Open Compute Project (OCP) conference in San Jose.
The Helios racks, which are AI hardware stacks built around AMD’s Instinct MI450 GPUs, are slated for launch in the second half of 2026, with Oracle planning a rollout of a 50,000-GPU cluster. These racks favor open designs, aligning with the preferences of tech giants like Meta and OpenAI. Arya conservatively estimates that AMD could capture over 5% of the AI accelerator market by 2027, an increase from previous estimates of 3-4%.
In a scenario involving full deployment of OpenAI’s resources—estimated to require 6 gigawatts over four years—Arya envisions that AMD’s EPS could reach between $10 and $11 in 2027, with the potential to exceed $15 by 2030.
These projections are set against the backdrop of a burgeoning $430 billion AI market by 2027, highlighting significant opportunities for growth for AMD.
As the company prepares to release its earnings report, investors will also be looking ahead to AMD’s Analyst Day on November 11, 2024, for further insights into its growth strategies, product roadmaps, and updates on its AI initiatives. Although AMD trails behind Nvidia Corp. (NASDAQ:NVDA) in the AI GPU market, it has positioned itself as a credible alternative for hyperscalers seeking to diversify their supply chains.
With strong earnings expectations, a history of successful November performances, and increasing exposure in the AI sector, AMD seems well-prepared for a potentially transformative month, contingent upon the results shared on Tuesday.
