Advanced Micro Devices reported third-quarter results that exceeded Wall Street forecasts, with total revenue climbing 45% compared to the prior year and data center sales approaching a doubling from the year-ago period. The company’s stock initially advanced 8% in extended trading before moderating as election-related market movements unfolded.
Data center operations have become the dominant segment for AMD, representing 64% of overall revenue compared to 47% a year earlier. CEO Lisa Su indicated on the earnings call that the company anticipates server revenue will double year-over-year in 2027, while data center artificial intelligence growth is projected to accelerate beyond previously communicated expectations from 90 days prior. Su noted that AMD has worked across its supply chain to secure necessary components including wafers, substrates, advanced packaging, and memory to support substantially higher growth levels next year.
The resurgence in AMD’s server central processing units has been driven by demand for agentic AI applications, which rely on these processors to power virtual machines capable of running independently for extended periods. Su stated on the earnings call that adoption is still in early stages, with expectations for sharp demand growth as agents see broader deployment and handle increasingly complex tasks. AMD’s data center segment also includes graphics processing units and full rack-scale systems called Helios that compete with comparable Nvidia offerings, with major cloud providers including Meta, Microsoft, Anthropic, and OpenAI beginning deployments.
For the fourth quarter, AMD projected approximately $17 billion in revenue, surpassing the $16.2 billion consensus analyst estimate. The company forecasted a gross margin of 55% for the quarter. Meanwhile, AMD’s traditional PC and gaming chip segment, where the company competes alongside Intel and Arm-based processors, continued to face headwinds, with revenue in that combined business declining 8% year-over-year to $3.7 billion as gaming revenue fell 40%.
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