Advanced Micro Devices reported a record third quarter on Tuesday, November 3, with revenue of $13.4 billion, up 45 percent from a year earlier, as sales in its data center business nearly doubled on surging demand for the chips that power artificial intelligence. Adjusted earnings of $2.09 per share beat Wall Street expectations of about $1.95, and the company forecast an even stronger fourth quarter, pointing to accelerating demand as it scales up production of its newest AI systems.
A Record Quarter, Driven by Data Centers
AMD, based in Santa Clara, California, said revenue for the quarter ended September 26 reached $13.377 billion, compared with $9.246 billion in the same quarter a year earlier. That topped both the company's own guidance of about $13.0 billion, plus or minus $300 million, and the consensus forecast of about $13.1 billion cited by MarketWatch and other outlets.
On an adjusted, or non-GAAP, basis, net income rose 77 percent to $3.471 billion, while adjusted earnings per share climbed 74 percent, from $1.20 a year ago to $2.09. On a GAAP basis, which follows standard accounting rules, net income was $2.428 billion, or $1.46 per diluted share, up 95 percent from a year earlier. The gap between the two measures largely reflects a $1.1 billion accounting charge tied to warrants issued to OpenAI, the Wall Street Journal reported, a charge that was mostly offset by an income tax provision.
Chief executive Lisa Su called it a record quarter, saying revenue exceeded the high end of the company's guidance. "Demand for our Instinct and EPYC products continued to strengthen, and we expect growth to accelerate further in the fourth quarter as we scale Helios and 'Venice' production," Su said in the company's earnings release. Chief financial officer Jean Hu added that the results showed "significant operating leverage" as the data center business drives scale.
The results landed after the stock market closed on Tuesday, following a bruising session for chip stocks the day before. AMD shares closed Monday at $466.84, down 7.52 percent, after opening the day above $510, according to market data cited in pre-earnings coverage. Even after that drop, the stock had more than doubled over the course of the year through Monday's close.
Data Center Sales Hit $8.5 Billion
The story of the quarter is the data center. AMD said data center segment revenue reached a record $8.5 billion, up 97 percent year over year, driven by strong demand for its EPYC processors and the launch of its Instinct MI450 Series graphics processors. That segment alone now accounts for about 64 percent of AMD's total revenue, up from 47 percent a year ago, according to the Wall Street Journal.
The shift matters because it marks AMD's transformation from a company long known mainly for personal computer processors into one whose fortunes are increasingly tied to the giant server farms that train and run AI models. Nvidia remains the clear market leader there, but AMD's results suggest it is gaining ground.
AMD said its Helios rack-scale systems, full server racks built around Instinct GPUs and sixth-generation EPYC CPUs, are now being used by Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure to run models and workloads. Hewlett Packard Enterprise also announced that Vultr will deploy the first Helios systems built by HPE, and Oracle said its new cloud computing instances will run on sixth-generation EPYC chips.
The company also pointed to new software and product steps, including the release of ROCm 10, its AI software platform, and the selection of its chips to power the LUMI-AI supercomputer in Europe.
The Rest of the Business: PCs Steady, Gaming Down
Outside the data center, the picture was more mixed. AMD's combined client and gaming segment reported revenue of $3.7 billion, down 8 percent from a year earlier. Within that total, the client business, which sells processors for personal computers, brought in $2.9 billion, up 7 percent, helped by sales of Ryzen mobile processors. The gaming business, by contrast, fell 40 percent to $773 million, which AMD attributed to lower semi-custom and graphics revenue.
The embedded segment, which covers chips for aerospace and defense, automotive, communications and industrial uses, grew 29 percent to $1.1 billion. AMD said growth there was led by aerospace and defense, automotive, communications and industrial end markets.
The PC result will be watched closely because rival Intel recently guided fourth-quarter revenue below expectations and blamed a steeper-than-expected PC slowdown, driven in part by high memory prices. AMD's client growth, modest as it was, suggests the slowdown has not hit it as hard.
AMD also announced two acquisitions aimed at strengthening its AI position: an agreement to acquire World Labs, bringing in model research expertise, and an agreement to acquire Taalas, which adds specialized silicon technology for running AI models efficiently. The company did not disclose financial terms for either deal in its earnings release.
A Bold Forecast for the Fourth Quarter
If the third quarter beat expectations, the fourth-quarter outlook raised them further. AMD said it expects fourth-quarter revenue of approximately $17 billion, plus or minus 3 percent. The midpoint of that range would represent year-over-year growth of about 66 percent and a sequential increase of about 27 percent from the third quarter. Non-GAAP gross margin, the share of revenue left after production costs, is expected to be about 55 percent, slightly below the 56 percent reported in the third quarter.
That guidance is significant because AMD shares have fallen after each of the company's last two earnings releases despite results beating estimates, as investors focused on whether the outlook justified the stock's run. This time, the company is explicitly telling investors that growth will accelerate, driven by strong demand across its data center portfolio and the ramp-up of Helios and Venice production.
Still, the forecast comes with caveats. AMD's outlook statements are forward-looking, and analysts have warned that supply limits could cap near-term growth and that AI margins tend to run slightly below the corporate average during a product ramp.
What This Means
AMD's quarter is best read as evidence that the AI infrastructure boom is broadening beyond a single supplier. For years, Nvidia has dominated the market for the most advanced AI chips, and investors have treated AMD as the most credible challenger. A data center business that has nearly doubled in a year, with its newest systems now running at some of the world's largest AI companies, gives that challenger story real numbers behind it.
It also shows how quickly the center of gravity in computing has moved. A company that once lived or died by PC sales now earns almost two-thirds of its revenue from data centers. That shift mirrors the wider economy, where spending on AI infrastructure, from chips to servers to power, has become one of the main drivers of growth, even as other parts of the technology sector, including gaming hardware, cool off.
For consumers, the direct effects are less visible but real. The same chips AMD sells to cloud providers underpin the AI assistants, search tools and online services that millions of Americans now use every day.
For investors, the question is no longer whether AMD can grow in AI, but whether it can grow fast enough, and profitably enough, to justify a stock price that has already more than doubled this year. The fourth-quarter guidance, if met, would go a long way toward answering that question in the affirmative. A miss, after such a bold forecast, would be judged harshly.
What Happens Next
AMD will hold a conference call with analysts at 5 p.m. Eastern on Tuesday to discuss the results, where executives are likely to face questions about Helios production, supply constraints, the pace of customer adoption, and how much of the fourth-quarter surge is already locked in through orders versus dependent on new demand.
Investors will also be watching Nvidia, which reports later in November, for a read on whether the whole AI chip market is accelerating or whether AMD is simply taking share.
For now, the numbers speak plainly: a record quarter, a data center business that has nearly doubled, and a forecast for an even bigger finish to the year. In a market that has punished chipmakers for anything less than perfection, AMD has given investors exactly the quarter they were hoping for.
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