Advanced Micro Devices delivered third-quarter results that surpassed Wall Street forecasts, with total revenue increasing 45% compared to the prior year and data center segment sales nearly doubling. The chipmaker’s stock gained 8% in after-hours trading following the announcement.
Data center operations have become the dominant portion of AMD’s business, representing 64% of overall revenue, up from 47% a year prior. Chief Executive Lisa Su indicated on the earnings call that server revenue is expected to double year over year in 2027, with data center artificial intelligence growth anticipated to accelerate beyond previous projections. The company plans to secure additional wafers, substrates, advanced packaging, memory, and other critical components to support elevated growth levels next year. Data center is projected to remain the primary driver of the company’s revenue and earnings expansion.
AMD’s central processing units have experienced renewed demand tied to the emergence of agentic artificial intelligence applications, which power virtual machines capable of operating independently for extended periods. Su noted that adoption is in early stages with expectations for sharp demand growth as agents are deployed more extensively and handle increasingly complex tasks. The company has also expanded its data center offerings to include graphics processing units and full rack-scale systems called Helios that compete with rival offerings. Major technology companies including Meta, Microsoft, Anthropic, OpenAI, and Oracle have begun adopting AMD Helios systems in their data centers.
For the fourth quarter, AMD provided guidance of approximately $17 billion in revenue, exceeding the average analyst estimate of $16.2 billion. Gross margin for the period is projected at 55%, slightly below the average analyst estimate of 55.3%. Outside of data center, AMD’s personal computer and gaming segments faced headwinds, with combined revenue declining 8% to $3.7 billion, and gaming revenue falling 40% from the prior year, reflecting broader weakness in those markets.
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