AMD (AMD) will report its fiscal first quarter earnings after the bell on Tuesday, less than a week after rival Intel (INTC) reported its worst quarterly loss as PC sales continue to tumble.
According to Gartner, worldwide PC shipments collapsed 30% year-over-year in the first quarter to of the year, falling to 55.2 million units. The problem? Limited demand from consumers and businesses and too much inventory mean fewer PCs are being sold.
Here’s what Wall Street expects of the chip maker in the quarter, as compiled by Bloomberg, compared to how the company performed in the same quarter in 2022.
Revenue: $5.3 billion expected versus $5.9 billion in Q1 2022
Adj. EPS: $0.56 expected versus $1.13 in Q1 2022
Data Center: $1.4 billion expected versus $1.2 billion in Q1 2022
Client: $908 million expected versus $2.1 billion in Q1 2022
Gaming: $1.5 billion expected versus $1.8 billion in Q1 2022
Embedded: $1.4 billion expected versus $595 million in Q1 2022
The PC market is experiencing some of its worst performance in years, as consumers and businesses pull back on purchasing new computers amid increased interest rates.
Overall Client revenue, which includes shipments of chips for PCs, is expected to fall 56% year-over-year in the quarter to $908 million. Segment revenue fell 51% in Q4 2022. Gaming revenue is also expected to take a hit, though it shouldn’t be nearly as bad as Client performance.
‘Pockets of demand’
But it shouldn’t all be bad news for AMD. Wall Street is calling for the company to report a 16% jump in Data Center revenue to $1.4 billion. Embedded segment revenue is also set to rise from $595 million in Q1 2022 to $1.4 billion in Q1.
The pain in the PC market also may have reached a bottom. According to Morgan Stanley Research equity analyst Erik Woodring, “pockets of demand are slowly emerging.”
Woodring says that for the first time in six months, PCs built, which make up 75% of shipments, have been revised upward in two consecutive months. AMD could also benefit from the AI boom, thanks to its graphics card capabilities.
Story continues
AMD’s numbers are coming as Intel continues to struggle amidst a broader turnaround effort. Rival Nvidia (NVDA) , meanwhile, is expected to report its quarterly earnings on May 24. Shares of the graphics chip maker have soared 93% year-to-date as of Tuesday afternoon. AMD shares are up 37%, while Intel is up just 14%.
By Daniel Howley, tech editor at Yahoo Finance. Follow him @DanielHowley
For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here
Read the latest financial and business news from Yahoo Finance