Earnings Preview | Leveraging AI to Reach New Stock Price Highs, Can AMD Continue to Narrow the Gap with NVIDIA?

According to Zhitong Finance APP, AMD (AMD.US) will announce its third-quarter financial results after the U.S. stock market closes on Tuesday. According to TradingView data, analysts expect AMD's earnings per share (EPS) to be $1.17, with revenue of $8.75 billion. In the same period last year, AMD's revenue was $6.82 billion, with an EPS of $0.92. In the previous quarter, AMD's revenue was $7.68 billion, with an EPS of $0.48.

So far this year, AMD has shown strong performance, with its stock price rising by about 115%. The boom in artificial intelligence has provided strong support for the stock price, and expectations of spending on artificial intelligence are expected to continue to support the company's financial metrics. Although AMD lags behind NVIDIA (NVDA.US) in terms of chip computing power for data centers, AMD offers its products at discounted prices, allowing it to carve out its own niche in this field. AMD is not far behind NVIDIA, and investors believe it can maintain a competitive advantage in pricing.

AMD has several products on its roadmap that are expected to further narrow the gap with NVIDIA. The next-generation AI rack "Helios" is built on AMD's next-generation Instinct MI400 series GPUs, and its performance is expected to be about 10 times that of the previous generation.

In addition to new deployments, server upgrade activities should help drive AMD's revenue expectations, which are crucial for the stock price's reaction to the earnings report. AMD CEO Lisa Su has been optimistic about the company's future development, previously stating, "Based on our strong product portfolio and the growing demand for high-performance and adaptive computing, we see clear opportunities for continued growth."

In every quarter over the past year, AMD's EPS and revenue have met or exceeded expectations, with data center investments continuously driving strong revenue growth. However, this optimistic track record also means that if its earnings fall short of expectations, it could trigger a sharp bearish reaction.

Earlier last week, AMD's stock price hit a new all-time high, highlighting the strong technical trend of the stock. Its stock price is above the 9-day and 21-day exponential moving averages (EMA), and well above the 50-day simple moving average (SMA). If the market reacts negatively to AMD's earnings announcement, these moving averages may provide potential support, with a pullback to the 21-day EMA placing the stock price at around $230. The potential for upside is still unknown in technical analysis, but the expected movement of 22.55 points could push the stock to a high of $283—after which, psychologically, the $300 mark may pose some resistance