Chipmaker AMD (NAS100:AMD) has a chance to impress the market with its Q1 earnings and break out of a sluggish descent.
On the weekly chart, AMD has found support at the $95 level and has resistance ahead at the $116.54 level. Those two will be important to the forward path of the stock, and the earnings sentiment could lead to another leg down, or an attempt to create a rebound.
Advanced Micro Devices is set to report its latest results after the US market closes on Tuesday, and analysts have lowered their price targets in recent weeks due to tighter restrictions on US chip exports to China.
Bank of America analysts lowered their price target to $105 from $110, saying the new licensing requirements from the Trump administration were an “effective shipment ban” on AMD’s MI308 chips. AMD management warned last month that the move could result in charges of $800 million without a license. Competitor Nvidia announced a $5.5 billion charge for its H20 chip, but its products are in greater demand.
Deutsche Bank analysts in late April cut their AMD price target to $105 from $120, while Wedbush Securities around the same time moved to $115 from $150.
Despite uncertainty over tariffs, Citi analysts wrote, “it appears that spending for AI continues to be unabated”. The large US tech companies are set to raise capital expenditures this year. Meta plans to spend $64 billion to $72 billion to build AI infrastructure, while Microsoft and Alphabet have AI spending targets of $80 billion and $75 billion, respectively.
“AI infrastructure build outs remain as key priorities for hyperscalers with the companies’ willingness to absorb the costs of tariffs,” Citi said. “We view this as positive for AI-exposed stocks,” including AMD, they added.
For the earnings report, analysts expect AMD to deliver first-quarter revenue of $7.13 billion, up 30% year-over-year. Earnings per share of 94 cents would be 50% higher than a year ago. Data center sales will be a key focus for analysts and are expected to climb 55% to $3.63 billion.
