AMD: How Will Stock Perform After Nvidia (NVDA) Q3 Earnings?
Nvidia is set to release its Q3 earnings report this Wednesday, which will likely impact rival tech stocks like AMD. Advanced Micro Devices, Inc. is a popular competitor to Nvidia in the AI business, also making chip technology. However, following its own Q3 earnings report earlier this month, AMD stock took a tumble. With its biggest competitor set for a big boost from Q3, how will AMD fair after Nvidia’s earnings report?
Currently, Advanced Micro Devices (AMD) stock is down 36% from its 52-week high of $211 in March. Hence, some market analysts are taking the “buy the dip” approach to AMD stock. AMD’s fall has some investors wondering if now is the time to buy AMD before a potential climb. It’s important to note that Nvidia is growing faster and is more profitable than AMD. In Q2 2024, Nvidia grew revenue by 122.4% to $30 billion with a 55.3% net margin. AMD currently has an 11.31% net margin in Q3, and the gap will likely widen once Nvidia reports Q3 figures on Wednesday.
How is Nvidia Expected to Perform In Q3 Earnings? How Will It Impact AMD Stock?
According to Bloomberg analysts, Nvidia is expected to report Q3 earnings per share of $0.74 on revenue of $33.2 billion. That works out to an 83% year-over-year increase on both the top and bottom lines versus the same period last year when Nvidia saw EPS of $0.40 on revenue of $22.1 billion. Meanwhile, Nvidia’s Data Center segment, its largest business, is set to bring in $29 billion for the quarter. That’s a 100% increase versus the $14.5 billion the company reported in Q3 last year.
With these earnings, Nvidia can either boost the entire tech stock market including AMD, or outshadow its rivals and cause them to slump further. The former will likely be the outcome, as the AI sector continues to dominate on Wall Street.
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For experts looking to decide on a stock to hold, many analysts suggest holding both AMD and Nvidia. In terms of pure value—considering upside potential relative to the current price—AMD stock appears to offer more value than NVDA stock at this moment, Insider Monkey’s Omor Ibne Ehsan suggests. NVDA stock remains an excellent long-term play for those focused on stability and leadership in AI. However, if you take price targets seriously, AMD stock provides a better risk-reward balance. That path is a very steep one, however it looks to be fueled by the ongoing AI wave on the markets. Therefore, it’s not entirely out in left field for AMD to rebound shortly after Nvidia’s Q3 earnings report this week.