Advanced Micro Devices will report its fourth-quarter earnings after the close on Tuesday. Management's forecasts for the current quarter may be surprisingly upbeat.

The consensus among analysts is that AMD will report December quarter revenue of $9.67 billion with adjusted earnings per share of $1.32. For the current quarter, analysts estimate revenue of $9.42 billion and EPS of $1.23, according to FactSet.

On Friday, HSBC(HSBC) analyst Frank Lee reaffirmed his Buy rating on AMD shares and raised his price target to $335 from $300.

"We believe that the rise of agentic AI is a significant catalyst for server CPU demand," he wrote. "We expect AMD to be a key beneficiary as the upside potential from server CPUs is not fully priced in."

Intel and AMD use the x86 chip architecture in making the central processing units that act as the main computing brains for PCs and servers.

Lee cited positive commentary about demand for server processors from Intel earlier this year. Intel also said they weren't able to meet the higher demand due to supply constraints.

"We believe AMD will be in a better position to deliver since it relies on external foundry," the analyst wrote. As a result, he expects AMD will give more favorable financial guidance for the first quarter than the Wall Street consensus.