AMD (AMD) will report its fourth quarter earnings after the bell on Tuesday, just as President Trump’s 10% tariffs on goods made in China come into effect and a little over a week after China-based DeepSeek rocked the AI world.
AMD shares have struggled throughout the last 12 months as the company has fought to gain ground in the AI data center space, falling 34% compared to rival Nvidia (NVDA), which has jumped 68%. Still, that’s better than archnemesis Intel (INTC), which has seen shares fall 53% in the same time period.
AMD, along with the rest of the PC space, also continues to contend with slow sales despite the broader industry push toward AI PCs — computers that feature specialized processors designed to power AI tasks.
For the quarter, Wall Street expects AMD to report earnings per share of $1.09 on revenue of $7.5 billion, according to Bloomberg consensus estimates. The company’s Data Center business, its largest segment by revenue, is expected to generate $4.09 billion for the quarter, up from $2.28 billion in the same period last year.
AMD’s Client segment, which includes chips for PCs, is set to bring in $1.98 billion, versus the $1.36 billion it saw last year. Gaming will generate $487 million, a steep drop from the $1.36 billion the group brought in during Q4 2023.
While Trump’s tariffs on Chinese-made goods won’t impact the majority of the high-end chip market, since many are manufactured in areas like Taiwan, the broader market for electronics, including servers and PCs, which are built in China, will be impacted.
Read more: The latest news and updates as Trump’s tariff deadline approaches
If businesses and consumers are turned off by higher prices on those systems and devices, chip manufacturers like AMD could face slowing sales.
Beyond the tariffs on Chinese goods, Trump has also raised the specter of tariffs specifically targeting semiconductors and products associated with them. Tariffs on chips could drive up prices for consumers and enterprises over a long stretch of time, as building chip manufacturing facilities is a complex task that requires careful planning.
In addition to Trump’s tariffs, DeepSeek is expected to be on investors’ minds during AMD’s earnings call. The Chinese AI startup sent shockwaves through Wall Street last week as investors and analysts digested news that DeepSeek produced its own AI model that’s as capable as Silicon Valley’s leading-edge models for millions of dollars less.
Investors dumped stocks in AI chipmakers including AMD, sending shares lower for the month, with Nvidia falling 19% and AMD dropping more than 9%.