A Bullish Call On AMD's Q3 Earnings, Guidance

Advanced Micro Devices, Inc. (NASDAQ: AMD) reports its third-quarter earnings after the closing bell Thursday, and expectations are high. On Monday, Deutsche Bank analyst Ross Seymore said he expects AMD to meet or beat earnings and sales expectations but sees little upside for the stock following its 116 percent gain in the past year.

According to Seymore, AMD will likely report Q3 EPS of 8 cents on revenue of $1.53 billion, mostly in line with Wall Street consensus estimates. Deutsche Bank is expecting MPU share gains from Intel Corporation (NASDAQ: INTC) and a strong performance for AMD products across the board.

“We anticipate solid growth in GPU driven by ramp of Radeon, Radeon Pro, Vega and continued strength in crypto-currency related demand, noting that TSMC recently highlighted a healthy crypto-currency demand environment in 3Q,” Seymore wrote (see Seymore's track record here).

Related Link: This AMD Bear Is No Less Bearish Ahead Of Q3 Earnings

Looking ahead to Q4, Seymore said Deutsche Bank is expecting revenue growth of 18 percent, near the high end of the company’s previously issued guidance range of 15 to 19 percent.

From a fundamental standpoint, Seymore said AMD continues to execute well in a strong semiconductor market. But at $14 per share, the market it already pricing in a great deal of optimism.

Citi analyst Philip Lee said Monday that AMD may have difficulty maintaining any CPU market share gains in the long term.

“Despite new products, AMD is still losing money [and] we see no change in sight as it fall further behind the competition,” he said.

Lee cited new tests that suggest Coffee Lake CPUs have a 21 to 23 percent performance advantage over Ryzen CPUs.

Deutsche Bank maintains a Hold rating and $12 price target for AMD stock.