AMD’s data center sales nearly doubled to $8.5B, and Q4 guidance tops $16B

AMD reported third-quarter revenue of $13.4 billion, up 45% from a year earlier, with data center sales up 97% to $8.5 billion. The chipmaker guided the fourth quarter to about $17 billion. CNBC reported that the stock rose 7% in extended trading.

Data center now carries two thirds of AMD

According to AMD’s results release, revenue for the quarter ended September 26 was $13,377 million, up 16% from the previous quarter. Non-GAAP earnings per share were $2.09 and GAAP earnings per share were $1.46. Gross margin was 54% on a GAAP basis and 56% non-GAAP. Non-GAAP operating income was $3,923 million, and non-GAAP net income was $3,471 million.

The segment split shows where the growth came from:

• Data Center: $8,546 million, up 97% year over year.
• Client and Gaming: $3,722 million, down 8%. Within it, client revenue was $2,949 million, up 7%, while gaming was $773 million, down 40%.
• Embedded: $1,109 million, up 29%.

CNBC calculated that data center now makes up 64% of AMD’s revenue, against 47% a year ago. Analysts surveyed by LSEG expected $1.95 in adjusted earnings per share and $13.09 billion in revenue, according to CNBC, so AMD beat both.

CEO Lisa Su said in the release: “We delivered a record quarter with revenue exceeding the high end of our guidance.” CFO Jean Hu said the fourth-quarter outlook “reflects accelerating revenue and earnings growth.”

A fourth-quarter forecast far above the Street

AMD guided fourth-quarter revenue to approximately $17 billion, plus or minus 3%, with a non-GAAP gross margin of about 55%. That implies growth of roughly 66% year over year and 27% from the third quarter at the midpoint, per the release. CNBC put the average analyst estimate at $16.2 billion, citing LSEG, and said the margin guide was slightly below the 55.3% average expected, citing StreetAccount.

The company listed several deployments behind the outlook. Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running workloads on the first Helios rack-scale systems, which combine MI450 Series GPUs with 6th Gen EPYC CPUs. HPE will deploy the first Helios systems for Vultr. AMD also introduced Helion, an open rack-scale blueprint that lets customers mix CPUs and GPUs, and released ROCm 10, its GPU software stack.

It also said it agreed to acquire World Labs and Taalas, a maker of specialized inference silicon. CNBC reported that the World Labs deal, announced in September, is valued at $8.2 billion in an all-stock transaction. The release does not give a price for Taalas.

Numbers in context: A CPU comeback and a weak PC market

The quarter lands in a week of mixed signals for chip stocks. CNBC noted that Intel’s data center revenue rose 78% in its third quarter, yet its shares fell sharply on Friday over weak guidance and doubts about its ability to meet demand. Our own report on Intel’s worst day since the 1970s covers that sell-off and what it did to the US government’s stake. AMD’s result shows the same server demand turning into stronger guidance rather than a warning.

CNBC attributes part of the demand to agentic AI applications, such as Meta’s Muse. It reports that AMD’s server CPUs matter there because they run the virtual machines that these programs can occupy for hours. AMD’s year-to-date share gain is about 125%, per CNBC’s article, though the stock fell for three straight days before Tuesday’s rally amid worries about overspending on AI infrastructure.

The consumer side is weaker. CNBC cited Counterpoint Research, which says global PC shipments fell 4% in the second quarter from a year earlier because of soaring memory and component costs. AMD’s gaming revenue drop of 40% sits in that context, though its client revenue still grew 7%.

The Helios racks tie directly to deals we have covered. In late October, AMD put $1 billion into Meta’s stock sale as Helios racks arrived. CNBC adds that AMD has committed to invest up to $5 billion in Anthropic, which filed its IPO prospectus last week. That makes some of AMD’s biggest customers also its investment targets, a circularity the release does not discuss.

What the results do not settle

The guidance is AMD’s own forecast and has not been independently verified. The release does not break out how much of the data center total comes from Instinct GPUs and how much from EPYC CPUs, so the split between the two is unknown. It also gives no Helios shipment volumes. Su told reporters in Taiwan in October, as CNBC reports, that she plans to “substantially increase our supply in 2027,” which leaves open whether supply can keep pace with the demand AMD describes. The next test is whether the $17 billion quarter arrives with a margin near 55%, given that the margin guide came in a shade under what analysts had expected.