AMD needs a big quarter to escape Intel’s fate as AI fears grow

AMD reports third-quarter results on Tuesday after its shares fell about 17% in two days alongside Intel. Analysts expect revenue to rise 41%, but investors say AMD needs a big beat and a strong outlook as AI spending fears grow.

AMD needs a strong quarter and a bold forecast when it reports results after the US market closes on Tuesday, investors told Bloomberg .

“ A modest report just won’t cut it, ” said Neville Javeri, a portfolio manager at Allspring Global Investments, which owns the stock.

The pressure comes from Intel. Its shares had their worst day since at least 1982 on Friday after a weak outlook . AMD fell 10% the same day and another 7.5% on Monday, though it is still up more than 120% this year.

Analysts expect AMD’s third-quarter earnings to jump 92% on a 41% rise in revenue. AMD had guided for about $13B in sales, after a record second quarter .

Part of the hope rests on processors. AI agents lean heavily on CPUs, as AMD’s chief technology officer argued in July , and the success of Meta’s Muse agents has led some analysts to raise their targets. Meta is AMD’s second-largest customer, and AMD’s Helios AI racks are now being tested there .

The risk is the mood around AI. Big spenders such as Alphabet and Meta have been punished for spending that eats into their cash, raising fears of a pullback that would hit chipmakers. In July, TSMC’s shares fell despite record revenue .

“ I’m just not super comfortable with the valuation, ” said Jim Worden of the Wealth Consulting Group, who has sold his AMD shares.