Overview of Upcoming Results

Advanced Micro Devices (AMD) is set to announce its financial results for the first quarter on Tuesday after market close. The recent tightening of U.S. export regulations, particularly aimed at China, has prompted several analysts to adjust their price forecasts for the chip manufacturer.

Impact of Export Restrictions

Bank of America Securities has revised its price target for AMD from $110 to $105. They characterize the new licensing requirements instituted by the Trump administration as an “effective shipment ban” affecting AMD’s MI308 chips. The company has indicated that it may face charges of up to $800 million if it cannot secure the necessary licenses.

In a similar vein, competitor Nvidia is expecting a potential charge of approximately $5.5 billion linked to its H20 chip.

Analyst Adjustments and Market Sentiment

A diverse range of institutions have adjusted their price targets for AMD. Deutsche Bank reduced theirs from $120 to $105, while Wedbush Securities shifted from $150 to $115. Despite these downward revisions, analysts tracking AMD through Visible Alpha concur on a consensus price target of $123.50, which represents a 25% premium over Friday’s closing price of $98.80. Out of 12 analysts, six recommend a “buy,” while five suggest holding, and one advises selling. Notably, AMD’s stock has seen a nearly 20% decline so far in 2025.

Positive Sentiment Around AI Spending

Despite the challenges posed by tariffs and export restrictions, analysts at Citi express optimism regarding ongoing investments in AI. They note a trend of sustained spending in AI infrastructure among major tech firms. For instance, Meta Platforms plans to increase its capital expenditures for AI infrastructure to between $64 billion and $72 billion. Likewise, Microsoft and Alphabet (Google’s parent company) have reaffirmed their AI-related spending targets of $80 billion and $75 billion, respectively.

Citi analysts emphasize that investments in AI infrastructure remain paramount for major tech companies, who are willing to absorb tariff-related costs. This environment is regarded as favorable for AI-centric stocks, including AMD.

Expectations for Q1 Performance

Analysts anticipate that AMD will report a revenue of $7.13 billion for the first quarter, reflecting a 30% increase year-over-year. Adjusted earnings are expected to reach $1.55 billion, translating to 94 cents per share—an increase of over 50% from the same period last year. Notably, data center revenues are projected to rise by 55%, reaching approximately $3.63 billion.