Advanced Micro Devices reported third-quarter earnings on Tuesday that beat Wall Street expectations, with adjusted earnings per share of $2.09 compared to the $1.95 consensus estimate. Revenue for the quarter reached $13.38 billion, exceeding the $13.09 billion expected by analysts and rising from $9.25 billion a year earlier, according to CNBC.
Data Center Segment Revenue Grows Ninety Seven Percent
The Santa Clara, California-based chip designer’s data center segment remains its primary engine, with revenue in that unit growing 97% year over year. AMD provided fourth-quarter revenue guidance of approximately $17 billion. During the earnings call, Lisa Su, chair and chief executive officer of Advanced Micro Devices Inc., stated that she expects server revenue to double year over year in 2027. She further noted that data center AI growth is expected to accelerate even faster than the company had projected 90 days ago.
Su emphasized the current supply constraints, stating, demand is higher than supply.
This report follows a difficult period for the stock, which had fallen 19% over the month leading up to the earnings announcement.
Company Scales Production Capacity to Address Limitations
To address these limitations, AMD is working to scale its production capacity.
The company is also diversifying its investments to strengthen its AI infrastructure. AMD has committed to investing up to $1 billion in Meta’s equity offering. Meta confirmed last week that its Helios racks—AMD’s first AI system designed to rival Nvidia’s Vera Rubin and Grace Blackwell systems—are up and running. AMD has also committed to investing up to $5 billion in Anthropic, which recently unveiled its prospectus as it nears a potential initial public offering.
The company is also expanding its software and modeling capabilities. AMD is developing a world model to simulate 3D environments, which is intended to assist in the development of robots and other physically grounded AI applications. This project is led by the San Francisco-based AI lab founded by industry pioneer Fei-Fei Li.
Mixed Performance in PC and Gaming Segments
While the data center business expanded, other segments faced headwinds. Total revenue for business units outside of the data center saw declines.
Shares Rise Six Percent in Premarket Trading
Following the earnings release, AMD shares rose 6% in premarket trading to about $512. The results provided a measure of relief to investors concerned about broader AI spending, especially as the sector reacts to volatility elsewhere. For instance, Intel’s stock plummeted 29% on the preceding Friday due to concerns regarding weak guidance and the company’s ability to satisfy demand. Conversely, the success of AMD’s latest quarter, alongside strong results from peers like Arista Networks, helped buoy the broader market, with the S&P 500 ETF rising 1% in delayed premarket trading.
Earlier coverage: AMD Faces Third-Quarter Earnings Under Heavy Market Pressure
