Advanced Micro Devices (NASDAQ:AMD) CEO Lisa Su has achieved almost heroic status. Moreover, AMD stock has rallied sharply in 2023 so far. Yet, not every expert on Wall Street is bullish about Advanced Micro Devices (commonly abbreviated as AMD). Ultimately, it’s smart for investors to get both sides of the story and maintain a reasonable position size in the stock.

The next major event for AMD is the company’s earnings release for the second quarter of fiscal 2023. This is slated to occur on Aug. 1. Will Su and her team pull off a headline-grabbing earnings beat? Before you back up the truck and buy too many AMD shares, it’s important to hear what the experts have to say. Then, you can make a more informed decision.

A ‘Tactically Cautious’ View of AMD Stock

We’ll start off with the bull case. First of all, out of 31 analysts, 24 of them have recently issued “buy” ratings on AMD stock. Seven analysts have issued “hold” ratings, and zero have issued “sell” ratings on the stock.

Furthermore, AMD has a track record of usually beating analysts’ quarterly earnings per share (EPS) forecasts. On the other hand, perhaps this has made analysts and investors too optimistic about the company.

Thus, Wells Fargo analyst Aaron Rakers feels that the consensus expectations for AMD’s Q3 results “look too high.” Consequently, Rakers is taking a “tactically cautious” stance toward AMD. He predicts that the company will report $5.4 billion in revenue and 60 cents in adjusted EPS for the quarter.

Rakers’ forecasts are less optimistic than the analyst consensus estimate, which calls for $5.9 billion in revenue as well as 74 cents in adjusted EPS. Nevertheless, Rakers believes that AMD may benefit from “a fully materializing EPYC Genoa + Bergamo product cycle” and the company’s MI300 chip launch early in 2023’s fourth quarter.

Expectations for AMD May Be Too Strong

Overall, Rakers is cautiously bullish as he issued an “overweight” rating and a price target of $150 on AMD stock. Not every analyst concurs with Rakers’ assessment, though. For example, Christopher Danely of Citi Research issued a “downside 90-day catalyst watch” on AMD shares.

Why would Danley offer a warning about AMD? Reportedly, he’s concerned that certain technology markets may be vulnerable. “We expect downside to estimates driven by the correction in the data center/gaming/embedded markets,” Danley explained.

If those markets are expected to comprise around 84% of sales for the 2023 calendar year, then clearly AMD stock is vulnerable to a pullback. Indeed, Danley envisions possible share-price downside amid “strong expectations driven by the MI 300 chip ramp.” With that in mind, Danley announced a “neutral” rating on AMD shares.

Don’t Go Overboard With AMD Stock

Interestingly, Rakers is bullish about AMD’s MI300 chip launch while Danley sees too-high expectations for MI300. Also, as you may have noticed, Raker’s isn’t completely bullish about AMD’s third-quarter prospects.

If you’re ambivalent, about AMD now, that’s understandable. The best thing to do now, I believe, is to consider all of AMD’s challenges and opportunities.

Then, if you’re ready, take a very small share position in AMD stock. That way, you’ll get some exposure to Su’s powerhouse chipmaker in 2023’s second half without over-leveraging yourself.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.