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Chip designer Advanced Micro Devices (NASDAQ:¶¶Òõ×îаæ) reports second-quarter (Q2) earnings on July 30 and the stock could move higher as a result.

Expectations are lofty . ¶¶Òõ×îаæ stock has declined due to the current rotation out of technology names, with its share price having fallen 12% in the last month. But even before the rotation into small-cap and value securities, ¶¶Òõ×îаæ stock had been struggling since the company’s previous first-quarter financial results met but did not exceed Wall Street’s expectations. The result is that ¶¶Òõ×îаæ stock is up only 1% on the year versus an 18% year-to-date gain in the tech-laden Nasdaq.

Despite the underperformance, many that the coming Q2 earnings report could be the catalyst that turns things around for ¶¶Òõ×îаæ’s share price. After all, investors love a good expectation beat, particularly in regards to a company competing in the graphics processing unit (GPU) sector.

Bullish Calls

Several analysts have raised their ratings and price targets on ¶¶Òõ×îаæ stock heading into the Q2 print. TD Cowen lifted its price target to $210 from $200 previously and said that the company’s set-up for the second half of 2024 is strong. Wells Fargo  to $205 a share from $190 and reiterated its overweight buy-equivalent rating on the stock. CNBC host Jim Cramer recently named ¶¶Òõ×îаæ one of the five stocks he would buy now.

Currently, ¶¶Òõ×îаæ stock has a consensus rating among 35 professional analysts who track the company’s progress. There are no sell ratings on the stock. The median price target on the shares is 40% higher than current levels. In addition to this, price targets on the stock have steadily risen over the past three months and heading into the Q2 print. The bottom line is that Wall Street is extremely bullish on ¶¶Òõ×îаæ stock and its prospects.

Accelerating Chip Sales

The reason sentiment is so positive towards ¶¶Òõ×îаæ is the company’s new artificial intelligence (AI) processors, many of which only became available to purchase at the beginning of this year. The second quarter numbers are expected to show accelerating sales of ¶¶Òõ×îаæ’s Ryzen 8040 processor that’s incorporated into laptops and personal computers (PCs), and its GPU that is used in data centers and servers.

Analysts will be watching carefully to see how demand for ¶¶Òõ×îаæ’s latest chips is holding up, particularly the MI300X that competes directly against archrival Nvidia’s (NASDAQ:NVDA) AI data center GPUs. ¶¶Òõ×îаæ has raised its forecast for its AI microchip sales this year multiple times in the last six months. Most recently, the company forecast , which is double the outlook it gave last autumn. For Q1 of this year, revenue in ¶¶Òõ×îаæ’s data center unit grew 80% year-over-year due to robust sales of the MI300X chip, and it had only been available for a few months at that point.

New Processors

In June of this year, ¶¶Òõ×îаæ unveiled a new chip for use in laptop computers. The new microchips will compete directly with Intel’s (NASDAQ:INTC) Lunar Lake and Qualcomm’s (NASDAQ:QCOM) Snapdragon X chips. Those new AI chips will help run AI-enabled laptop computers, such as the upcoming Microsoft Surface laptop that comes equipped with that company’s Copilot chatbot.

¶¶Òõ×îаæ also announced a new of central processing units for desktop computers, calling them “the world’s fastest consumer PC processors” for both gaming and content creation. ¶¶Òõ×îаæ continues to be a leading supplier of microchips and processors for video game consoles and gaming PCs. Both lines of new chips from ¶¶Òõ×îаæ launched in July and should power the company’s sales during this year’s second half and heading into 2025.

Buy ¶¶Òõ×îаæ Stock

The Q2 print from ¶¶Òõ×îаæ is a test for the company and its stock. But analysts remain bullish and so too should investors. Indications are that the company’s revenue and profits will get a boost from strong sales and growing demand for its latest generation of AI microchips and processors.

The second half of this year looks likely to be very strong as ¶¶Òõ×îаæ continues to release cutting-edge technology that can power AI models and applications. With the share price slumping heading into the Q2 print, now would be an opportune time to .

On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com .

On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.