Shares of Advanced Micro Devices (NYSE: AMD) have crushed the market since filing its last quarterly report. With a 28% three-month gain, the processor designer also destroyed larger rival Intel's (Nasdaq: INTC) 9% return. About half of the gains have come in the last week or so, helped by a surprisingly strong Intel report. In fact, AMD jumped higher than Intel on the larger rival's good news.

What's going on here? AMD reports fourth-quarter results tomorrow night, and this highly volatile stock is likely to make another big move on the report. The question is, in which direction?

Let's start with a look at Wall Street's expectations:

Metric

Q4 2011 Estimates

Midpoint of Q4 2011 Guidance

Q4 2010

Revenue $1.72 billion $1.74 billion $1.65 billion
Non-GAAP Earnings Per Share $0.16 $0.16 $0.20

Source: Yahoo! Finance and S&P Capital IQ.

At first glance, these estimates may look like a Gregorian plainchant in perfect unison with official guidance. But that's not the case.

The revenue estimates are tightly clustered right around the official forecast, but the 27 analysts with an earnings opinion range from $0.07 to $0.20 per share. Like the stock chart, the bottom line looks very unpredictable.

The company has blown away estimates in each of the last four quarters by an average of more than 37%. Another beat down on that scale would land north of $0.20 per share. But is AMD simply lowballing analysts in the grand old Apple underpromise-and-overdeliver tradition, or has the company worked hard to earn each of these surprise performances?

In the third quarter, freshly appointed CEO Rory Read said that there was strong demand for AMD products, marred by production yield issues. "No doubt, we must improve our execution and we are taking action to improve our ability to consistently deliver our products on time, day in and day out," he said.

Those words were backed up by radically lower inventories of finished goods and work in process, so AMD's new processor lines really do appear to have found an audience. The company is playing a distant second fiddle to Intel in desktops and notebooks, and is barely visible in the larger rival's rearview mirror in the server market.

Hardware reviewers have not been impressed by AMD's new server products, codenamed Bulldozer. But perhaps the low-cost approach is enough to steal market share from Intel's established high performers. I can't make that call until we see this week's report.

If AMD's volatile ways leave you looking for a bottle of Tums, you should check out this report on 11 rock-solid dividend payers instead. The rest of us will simply add AMD to our Foolish watchlists and wait for the next dramatic buying opportunity.