Advanced Micro Devices Inc. (NASDAQ:AMD) is poised to reveal its third-quarter earnings on November 7, 2023, with expectations of strong performance driven by a favorable market environment and an increasing focus on artificial intelligence (AI). Analysts predict earnings of $1.16 per share, up from $0.92 a year earlier, alongside revenue estimates of $8.74 billion, a significant increase from $6.72 billion in the same quarter last year. This anticipated growth reflects AMD’s expanding footprint in the AI chip sector.
November Trends Favor AMD’s Performance
Historically, November has been a particularly lucrative month for AMD. Over the past decade, the company’s stock has seen an average return of 16.8% in November, finishing higher in eight out of the last ten years. Notable was November 2021, when shares surged by 31.7%. Since 1995, AMD’s stock has averaged a 12.07% gain for the month, underscoring its seasonal strength. While 2024 has seen a 4.79% decline in November returns, AMD has historically navigated this month with double-digit gains from 2018 to 2023.
The company has only recorded significant losses greater than 5% five times in the last 30 years, with the most severe drops occurring during market downturns in 2000 and 2008.
Analysts Boost Expectations Amid AI Progress
The optimism surrounding AMD’s upcoming earnings report is bolstered by the company’s advancements in AI technology. Bank of America analyst Vivek Arya recently raised AMD’s 12-month price target to $300, reflecting a 13% potential upside from current levels. Arya highlighted AMD’s visibility regarding the deployment of its MI450 “Helios” racks, which are designed for AI applications and are expected to launch in the second half of 2026. This follows significant announcements made during the 2025 Open Compute Project conference in San Jose.
These Helios racks, which incorporate AMD’s Instinct MI450 GPUs, are set to support substantial AI workloads, with Oracle planning a rollout of a 50,000-GPU cluster. Arya projects that AMD could capture over 5% of the AI accelerator market by 2027, up from previous estimates of 3-4%. In a scenario of full deployment by OpenAI, Arya estimates that AMD’s earnings per share could reach between $10 and $11 by 2027, with the potential to exceed $15 by 2030.
As investors anticipate the results of the earnings report, all eyes will also be on AMD’s Analyst Day on November 11, 2023. This event is expected to provide further insights into the company’s growth strategy and updates on its product roadmap, particularly in the AI segment. While AMD currently trails behind Nvidia Corp. (NASDAQ:NVDA) in the AI GPU market, it has emerged as a viable alternative for hyperscale data centers seeking to diversify their supply chains.
With robust earnings expectations, a proven history of strong November performance, and an increasing focus on AI technologies, AMD appears well-positioned for a successful month. Investors will be keenly awaiting the figures reported on Tuesday to see if they align with this optimistic outlook.
