2019 has been a volatile year for chipmaker stocks like Advanced Micro Devices (NASDAQ:AMD). Chip stocks have been hit hard by trade war tensions and fears of an upcoming recession. In spite of this, AMD stock, and the AMD stock price, has made substantial gains this year. The company’s shares are up 34% year-to-date.
Advanced Micro Devices is set to report its third-quarter earnings at the end of the month. The company does have a mixed track record when it comes to earnings reports, with two out of the last four earnings reports missing Wall Street expectations.
Listed below are three things to watch for in AMD’s third-quarter earnings.
Can AMD Stock Continue to Gain Market Share?
The company’s recent stock gains are largely thanks to its impressive chip lineup. Last July, AMD launched the Radeon VII, a 7-nanometer graphics card.
This card allows for a faster gaming experience, and users can create content faster, all without increasing their power consumption. This product launch gave investors more reasons to be optimistic about AMD’s growth prospects.
The Radeon VII is also very competitively priced, so it presents an attractive alternative to anything other companies are offering. Nvidia is set to launch its own 7-nanometer GPU in early 2020, so this gives AMD a head start on the company.
During the next earnings report, investors will be looking to see that the company’s product sales are continuing to perform well. AMD also needs to show that it is continuing to take market share from companies like Nvidia and Intel.
Will AMD’s Semi-Custom Business Stay Strong?
AMD also provides semi-custom processors for game consoles for companies like Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE). The company’s current consoles are reaching the end of their product cycles, with new models due in 2020.
There has been some speculation that once the current consoles near the end of their product cycles, that AMD’s semi-custom sales will drop. The company’s third-quarter sales will be a good indication of what to expect in the upcoming quarters.
Can Advanced Micro Devices Overcome Political Headwinds?
Finally, AMD needs to show that it can continue to perform well in spite of ongoing political headwinds. Investors need to see that there’s still a demand for CPUs, despite what’s currently going on with the trade war or the economy.
However, chip stocks have been doing well, and Wall Street seems optimistic when it comes to AMD stock. We’ll know more when the company releases its earnings report on Oct. 29.
As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.