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Computer processor maker AMD will be reporting earnings this Tuesday after the bell. Here’s what investors should know.

AMD beat analysts’ revenue expectations last quarter, reporting revenues of $11.54 billion, up 50.1% year on year. It was a strong quarter for the company, with a meaningful improvement in its inventory levels and revenue guidance for next quarter topping analysts’ expectations.

Is AMD a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.

This quarter, the market is expecting AMD’s revenue to grow 41.8% year on year, improving from the 35.6% increase it recorded in the same quarter last year.

Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. AMD has a history of exceeding Wall Street’s expectations.

Looking at AMD’s peers in the processors and graphics chips segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Penguin Solutions delivered year-on-year revenue growth of 67.7%, beating analysts’ expectations by 8.8%, and Allegro MicroSystems reported revenues up 29.2%, topping estimates by 2.1%. Penguin Solutions traded up 13.1% following the results while Allegro MicroSystems was down 13.7%.

Read our full analysis of Penguin Solutions’s results here and Allegro MicroSystems’s results here.

In the last twelve months or so, the market has shifted its attention from one area of macro importance to the next (AI disintermediation and AI capex spending to geopolitical conflict, rates, and whether the economy is on solid footing or not). Unfortunately, processors and graphics chips stocks have struggled in this environment as share prices are down 18.8% on average over the last month. AMD is down 19.5% during the same time and is heading into earnings with an average analyst price target of $640.21 (compared to the current share price of $508.40).

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