Advanced Micro Devices reported third-quarter results Tuesday that exceeded Wall Street forecasts, driven by a near doubling of data center sales. The chipmaker’s stock rose 7% in extended trading following the announcement.
Here is how the company performed against LSEG consensus estimates for the quarter:
- Earnings per share: $2.09 adjusted vs. $1.95 expected
- Revenue: $13.38 billion vs. $13.09 billion expected
Total revenue climbed 45% year-over-year from $9.25 billion. In a press release, Chief Executive Officer Lisa Su projected that growth in data center processors would “accelerate further,” expressing confidence that supply constraints would not hinder demand.
“With our leadership product portfolio and deep customer and supply chain relationships, we are confident in our ability to sustain very strong revenue growth and expanding profitability over the coming years,” Su stated.
The results arrive days after rival Intel reported a 78% jump in its own data center revenue, though Intel shares tumbled on concerns regarding its outlook and ability to meet demand. AMD’s data center segment now represents the bulk of the business, accounting for 64% of total revenue, up from 47% a year ago.
After years of pursuing Nvidia in the market for artificial intelligence graphics processing units, AMD’s central processing units are seeing a significant resurgence fueled by the rise of agentic AI applications such as Meta’s Muse. Server CPUs are critical for these workloads because they power the virtual machines capable of running autonomously for extended periods. Demand tied to agentic AI propelled AMD shares to a record high in October.
PC Market Headwinds Persist
Despite a gain of roughly 125% for the year, AMD shares had declined for three consecutive sessions prior to the earnings release amid a broader industry sell-off driven by fears of excessive AI infrastructure spending.
AMD remains a major supplier in the weakening PC market, a factor Intel cited for its own disappointing forecast last week. Alongside Intel, AMD dominates the traditional x86 processor market for laptops and desktops, while Arm-based alternatives from Qualcomm and Apple continue to gain traction.
Global PC shipments fell 4% year-over-year in the second quarter as soaring memory and component costs weighed on demand, according to Counterpoint Research.
AMD reports PC and gaming chip sales in a combined segment. Revenue in that division declined 8% annually to $3.7 billion, with gaming revenue specifically dropping 40%.
For the fourth quarter, AMD guided for approximately $17 billion in revenue, surpassing the $16.2 billion average analyst estimate compiled by LSEG. The company expects a gross margin of 55%, slightly below the 55.3% consensus estimate from StreetAccount.
Beyond CPUs, AMD sells data center GPUs and full rack-scale systems dubbed Helios, which compete directly with Nvidia’s Grace Blackwell and Vera Rubin platforms. Major hyperscalers including Meta, Microsoft, Anthropic, OpenAI, and Oracle are beginning to deploy Helios racks in their data centers. Meta confirmed last week that its Helios installations are operational, and AMD has agreed to invest $1 billion in a Meta equity offering.
AMD has also committed up to $5 billion to Anthropic, which recently filed its prospectus ahead of a potential initial public offering.
During a trip to Taiwan in October, Su indicated plans to “substantially increase our supply in 2027.” Both Su and Nvidia Chief Executive Jensen Huang have made repeated visits to Taiwan and South Korea this year to secure capacity from key suppliers such as Taiwan Semiconductor Manufacturing Company and memory manufacturers SK Hynix and Samsung.
In September, AMD announced an $8.2 billion all-stock acquisition of World Labs, the San Francisco AI lab founded by pioneer Fei-Fei Li. The startup is developing “world models” that simulate 3D environments to advance robotics and physically grounded AI applications.
WATCH: Helios is AMD’s first AI system to rival Nvidia Vera Rubin — we got an exclusive, first look
