Advanced Micro Devices reported third-quarter results above Wall Street estimates on Tuesday, as strong data center sales helped lift revenue 45% from a year earlier. AMD shares rose 8% in extended trading after the report.
The chipmaker posted adjusted earnings of $2.09 per share, compared with the $1.95 analysts had expected, according to LSEG estimates. Revenue reached $13.38 billion, ahead of the $13.09 billion consensus and up from $9.25 billion a year earlier.
Data center revenue nearly doubled year over year. The segment accounted for 64% of AMD’s total revenue, compared with 47% a year ago, and the company expects it to drive most of its future revenue and earnings growth.
CEO Lisa Su said AMD expects server revenue to double in 2027, with growth in data center AI accelerating faster than the company anticipated three months earlier. She said AMD had worked with suppliers to secure components needed to support stronger growth next year. Su also told analysts that demand for processors used in AI agent applications is expected to increase as those systems become more widely deployed and handle more complex tasks.
AMD forecast fourth-quarter revenue of about $17 billion, above the average analyst estimate of $16.2 billion. It expects a gross margin of 55%, slightly below the 55.3% estimate cited by StreetAccount.
Results were weaker in AMD’s business combining PC and gaming chips. Revenue there fell 8% year over year to $3.7 billion, while gaming revenue declined 40%.
AMD also sells data center GPUs and Helios rack-scale systems. The report said Meta, Microsoft, Anthropic, OpenAI and Oracle are beginning to use Helios in their data centers. AMD has also agreed to invest $1 billion in Meta’s equity offering and committed to invest up to $5 billion in Anthropic.
Sources: CNBC Markets.