Advanced Micro Devices reported record third-quarter revenue of $13.38 billion on November 3, up 45 percent from a year earlier, and forecast fourth-quarter revenue of about $17 billion, above Wall Street expectations. Data center revenue nearly doubled to a record $8.55 billion, now almost two-thirds of the company’s sales, while adjusted earnings reached $2.09 per share against $1.95 expected. Shares rose about 8 percent in extended trading after the announcement.
The beat was in the data center
The data center segment supplied the quarter’s story. AMD said revenue there reached $8.55 billion, up 97 percent from a year earlier and above the $8.20 billion analysts expected, driven by demand for its EPYC server processors and the launch of its Instinct MI450 series graphics processors. Segment operating income rose to $2.88 billion from $1.07 billion a year earlier.
Outside the data center, the picture was mixed. Client and gaming revenue fell 8 percent to $3.72 billion, missing the $3.79 billion analysts expected, as gaming revenue dropped 40 percent on lower semi-custom and graphics sales. Embedded revenue rose 29 percent to $1.1 billion, led by aerospace and defense, automotive, communications and industrial markets.
The guide reaches into 2027
AMD expects fourth-quarter revenue of about $17 billion, plus or minus 3 percent, against the $16.23 billion analyst average. The midpoint implies about 66 percent growth year over year and 27 percent sequentially. Non-GAAP gross margin is expected to be about 55 percent, in line with estimates and down from 56 percent in the third quarter.
On the earnings call, chief executive Lisa Su went further, telling analysts she expects overall revenue to rise more than 80 percent in 2027, above the 77 percent analysts estimate. Su said data center chips would supply 80 percent of sales next year and drive most of the company’s revenue and earnings growth, a forecast Reuters reported after the call.
Helios moves from promise to production
The forecast rests on Helios, AMD’s rack-scale system, which combines Instinct accelerators with Venice server chips. Reuters reports the Helios rack is in production and set for a larger ramp in the fourth quarter, with initial systems being tested at Meta. AMD says Anthropic, Meta, Microsoft, OpenAI and Oracle are running models and workloads on the first Helios racks.
That shift matters because it moves AMD beyond selling standalone chips into complete systems, the ground where Nvidia has long set the terms. Rack-scale machines also lean heavily on fast optical networking between chips, a bottleneck the whole industry is racing to widen as clusters grow larger and hungrier for bandwidth.
Why It Matters
This quarter matters because it answers the fear that AI infrastructure spending is cooling. AMD’s beat arrived a week after rival Intel issued a weak outlook, and it followed Supermicro’s own record quarter on AI server demand. Together, the two reports suggest the buildout is still accelerating, even as investors question how long customers can keep paying for it.
The result also reframes AMD’s role. A year ago, data center sales were 47 percent of revenue; now they are 64 percent. If Su’s 2027 forecast holds, AMD stops being mainly a PC and gaming chip company with a data center division, and becomes a data center company that also sells PC and gaming chips.
Our read
The most telling number is not the beat but the guide. A $17 billion quarter would be a step change, not a continuation, and Su’s 2027 forecast puts AMD’s credibility on the line in a way one quarter does not. Execution is the risk: Helios must ramp, memory must stay available, and customers must turn pilot racks into repeat orders.
A warning sits inside the release. AMD expects PC unit shipments to fall by a double-digit percentage next year, though Su said the company would outperform the market. Nvidia still dominates AI accelerators, and its tightening grip on cloud customers shows a rival defending its position, not surrendering it. AMD is gaining ground, not yet winning the race.
Background
AMD, based in Santa Clara, California, has spent years building an alternative to Nvidia’s AI hardware, pairing its EPYC processors with Instinct accelerators and an open software stack. The third quarter ended September 26, and the results are the company’s latest test of whether that bet can scale.
Source: AMD earnings release and Reuters report
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