Shares of Advanced Micro Devices AMD gained more than 2.5% in morning trading hours on Monday, just one day before the trendy chipmaker is set to release its latest quarterly earnings results. Now, with the stock on the rise ahead of its report date, many investors will be wondering whether it is time to buy AMD or avoid the often-volatile semiconductor maker altogether.

Based in Sunnyvale, California, AMD produces microprocessors, chipsets, discrete graphics processing units (GPUs), and professional graphics. The company operates under two segments: Computing & Graphics and Enterprise, Embedded & Semi-Custom.

AMD has garnered significant attention over the past few years thanks to a rise in demand for many of its products and an influx of noteworthy competitors in its key businesses. The stock is up just a modest 24% over the past year, but investors can bet that Wall Street’s focus will be firmly planted on the company when it reports on Tuesday.

Latest Outlook

Based on our latest Zacks Consensus Estimates, we expect AMD to report adjusted earnings of 5 cents per share and revenues of $1.40 billion. In the year-ago period, the company posted a per-share loss of one cent and revenues of $1.11 billion.

Of course, total earnings and revenue are not the only items in AMD’s report that investors will be interested in. In fact, it is possible that AMD’s post-earnings momentum is inspired by its performance in key business units. To prepare for this, we can turn to our exclusive non-financial metrics consensus estimate file.

The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.

According to our latest consensus estimates, AMD is expected to report Computing & Graphics revenues of $839 million, up about 39.8% from the year-ago period. That growth rate would represent a noticeable cooling off from the 73.5% expansion witnessed last quarter, but strong demand for GPUs in like gaming and cryptocurrency mining should still lift results.

Meanwhile, our consensus estimates are calling for AMD to post Enterprise, Embedded & Semi-Custom revenues of $562 million, which would mark year-over-year growth of roughly 11.1%. This result would also represent an improvement from the 1.3% slump witnessed last quarter. Analysts have cited strong adoption of the company’s EPYC server processors as a key growth catalyst in this division.

Earnings ESP Whispers

Investors will also want to anticipate the likelihood that AMD surprises investors with better-than-anticipated earnings results. For this, we turn to our Earnings ESP figure.

Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates. This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.

A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.

Just one day out from its report, AMD is sporting a Zacks Rank #3 (Hold) and an Earnings ESP of 12.75%. That is because the company’s Most Accurate Estimate for earnings sits at 6 cents per share, meaning that the most recent analyst estimates have been higher than the consensus. This improved outlook is a good sign heading into the report.

Price Performance and Surprise History

Another important thing to consider ahead of AMD’s report is the company’s history of earnings surprises and the effect that these surprises have had on share prices. To view the latest trends here, check out the company’s price and surprise chart over the course of its last three quarters:

Advanced Micro Devices, Inc. Price and EPS Surprise

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