Advanced Micro Devices Inc. earnings are expected to benefit from a rare surge in PC sales and what are seen as competitive gains against chip giant Intel Corp., but huge gains in the stock recently are subject to pullbacks given AMD’s traditional volatility following earnings.

AMD US:AMD is scheduled to report quarterly earnings after the close of trading Wednesday.

Recently, research firms Gartner Inc. and International Data Corp. reported that quarterly PC shipments saw their strongest year-over-year growth in six years, and analysts see AMD benefiting from that. Another likely beneficiary from strong sales would be PC-chip leader Intel US:INTC, which reports the day after AMD, but some analysts see AMD making significant gains against Intel’s dominant position. For instance, Northland Capital Markets analyst Gus Richard downgraded Intel in June after concluding that AMD is pulling ahead in terms of manufacturing processes.

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Watch for how that advantage works out in AMD’s outlook, said Cowen analyst Matthew Ramsay, who has an outperform rating and $21 price target.

“Heading into AMD’s 2Q18 call, we look for further discussion on near-term PC sales momentum, new 7nm Vega GPU launches and the overall CPU/GPU roadmap on 7nm heading into 2019,” Ramsay said in a note. “Front and center for AMD is its advancements into 7nm that will likely place it on process node parity with Intel’s 10nm during 2019, a dynamic not seen in over a decade.”

“7nm” and “10nm” — where “nm” means nanometers — refers to how small a chip maker can make the transistors that go on a computer chip, with the general rule being that smaller transistors are faster and more efficient in using power.

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Meanwhile, declining sales of graphics cards used by cryptocurrency miners appears to have become more of a widely accepted reality by analysts, but more erosion in that area, which makes up about 10% of AMD sales, could pose a headwind to the stock price.

“While cryptocurrency weakness is a potential overhang on the 3Q18 guidance, we would view any (unexpected) negative headline-risk as a buying opportunity as the vertical has zero impact on our long-term thesis and we have largely removed any contribution from our model starting in 2019,” Cowen’s Ramsay said.

What to expect

Earnings: Of the 26 analysts surveyed by FactSet, AMD on average is expected to post adjusted earnings of 12 cents a share. Estimize, a software platform that uses crowdsourcing from hedge-fund executives, brokerages, buy-side analysts and others, calls for earnings of 14 cents a share.

Revenue: Wall Street expects revenue of $1.72 billion from AMD, according to 25 analysts polled by FactSet. AMD predicts revenue of $1.68 billion to $1.78 billion. Estimize expects revenue of $1.76 billion.

Stock movement: AMD shares have rallied nearly 70% since the chip maker’s last earnings report, compared with a 6.2% advance in the S&P 500 index US:SPX and a nearly 12% gain in the Nasdaq Composite Index US:COMP over the same period. Those gains are subject to AMD’s traditional volatility from earnings reports. In the past 12 quarters, pricing in AMD shares have swung by double-digit percentages six times in the day following earnings, with the direction not always corresponding to whether results beat Street estimates or not.

What analysts are saying: Of the 33 analysts who cover AMD, 13 have buy or overweight ratings, 14 have hold ratings and six have sell or underweight ratings, with an average price target of $14.88.

Bernstein analyst Stacy Rasgon, who has an in-line rating and a $13 price target on the stock, said weak cryptocurrency sales, “not a surprise anymore,” could “prove problematic as we believe investors might have underestimated the degree to which GPU sales have contributed to client results over the last several quarters.”

Deutsche Bank analyst Ross Seymore, with a hold rating and a $14 price target, said he expects AMD to provide a forecast above Street estimates on PC demand.

“Overall we expect AMD to deliver a solid report/guide, with consensus revenue estimates likely to again see upward revisions,” Seymore said. “While we remain impressed by AMD’s PC-product execution (Ryzen), we see much of the current PC-related goodness and the future growth potential of EPYC being reflected in the recent rally in AMD shares.”

Edgewater Research analyst Kevin Rottinghaus, with a neutral rating on AMD and a $16.85 price target, said he is seeing increased optimism for AMD’s server share outlook.

“The two key reasons behind the optimism on AMD are expected improvements on EPYC 2/Rome and the lack of a new product from INTC,” Rottinghaus said.

“Given the many positive PC industry data points for 2Q18, we believe shipments for AMD’s Zen-based PC CPU line up tracked in-line to slightly better than management’s guidance,” said Stifel analyst Kevin Cassidy in a note. “The surprise upside may come from the company’s Epyc server CPU gaining traction ahead of consensus expectations for 5% unit market share exiting 4Q18.”

“We expect AMD to benefit from the stronger than expected results, especially given the trends for enterprise, gaming, and high-end notebooks, all markets in which AMD has improved its competitive position through its Ryzen processors,” said Cassidy, who has a buy rating and a $21 price target on AMD.