AMD Revenue Rises 45% to $13.4B and Company Guides to $17B as Data Center Sales Nearly Double

AMD reported third-quarter revenue of $13.4 billion today, Nov. 3, after the market close. That is up 45% from $9.25 billion a year earlier and above the top of the company's own guidance range of $13 billion, plus or minus $300 million.

Adjusted earnings came in at $2.09 a share, up 74%. LSEG consensus was $1.95 on $13.09 billion in revenue. Bloomberg's consensus, as cited by Yahoo Finance, was $1.97 on $13.08 billion. Shares gained roughly 7% to 8% in extended trading, with moves of nearly 10% at one point.

Data center does the heavy lifting

Data center revenue hit a record $8.5 billion, up 97% from $4.3 billion. Segment operating income rose to $2.9 billion from $1.1 billion. The unit now makes up 64% of AMD's revenue, up from 47% a year ago.

AMD credited demand for its EPYC server processors and the launch of its Instinct MI450 Series GPUs. The company said Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running models and workloads on its first Helios rack-scale systems, which pair MI450 GPUs with 6th Gen EPYC CPUs.

AMD also announced agreements to acquire World Labs and Taalas to expand its AI capabilities.

CEO Lisa Su said demand for Instinct and EPYC products "continued to strengthen" and that growth will accelerate further in the fourth quarter "as we scale Helios and Venice production." On the earnings call she said agentic AI adoption "is just starting."

The guide

For the fourth quarter, AMD expects about $17 billion in revenue, plus or minus 3%. That would be roughly 66% growth from a year earlier and roughly 27% above the quarter just reported. The LSEG average estimate was $16.2 billion.

The gross margin outlook was a shade light. AMD guided to about 55% non-GAAP, against a StreetAccount average of 55.3% and the 56% it posted in the third quarter.

CFO Jean Hu said the outlook "reflects accelerating revenue and earnings growth, driven by strong demand across our Data Center portfolio."

Not every segment grew

The combined Client and Gaming segment fell 8% to $3.7 billion. Client revenue alone rose 7% to $2.9 billion on Ryzen mobile sales. Gaming fell 40% to $773 million on lower semi-custom and graphics revenue, according to AMD.

Embedded revenue rose 29% to $1.1 billion, which AMD tied to aerospace and defense, automotive, communications and industrial markets.

The PC weakness is an industry problem. Counterpoint Research said global PC shipments fell 4% in the second quarter from a year earlier because of soaring memory and component costs. Intel blamed that market for its own weak outlook last week.

The cash question

Profit grew faster than sales. Non-GAAP operating income rose 75% to $3.9 billion, and the non-GAAP operating margin widened to 29% from 24%. GAAP net income rose 95% to $2.43 billion, or $1.46 a share, from $1.24 billion, or $0.75.

Cash did not keep pace. Motley Fool analyst David Kretzmann pointed to free cash flow of $554 million, down from about $1.5 billion a year earlier. He wrote that AMD added about $3 billion of inventory in the quarter as it builds Helios rack systems and Venice chips, and that its debt more than doubled since June.

Kretzmann's reading is that the cash comes back if the products ship on schedule, but that "if demand slips, AMD is left holding a lot of expensive stock."

GAAP results also absorbed a $1.1 billion charge tied to warrants AMD issued to certain customers, per Kretzmann's analysis. He noted the charge rises with AMD's share price, so a strong stock can shrink reported earnings. He also noted the release does not say how many warrants are outstanding.

Intel's miss, AMD's beat

The report follows Intel's disclosure last week that its own data center revenue rose 78% in the third quarter. Intel guided fourth-quarter revenue to $15 billion to $16 billion, well below analyst projections. It said the PC market should stay soft at least through the first half of next year. Its stock fell nearly 29% on Friday.

AMD is up about 125% this year, according to CNBC, and hit a record in October on demand tied to agentic AI. The stock then saw three consecutive days of losses during an industrywide sell-off tied to fears of overspending on AI, before rallying Tuesday. The guide is the number that now sets expectations.

AMD's fourth-quarter report will show whether revenue lands near $17 billion, whether inventory starts converting to cash, and whether gross margin holds near 55% as rack-scale systems ramp.