AMD Revenue Surges to $13.4 Billion on Data Center Demand

Advanced Micro Devices posted total revenue of $13.38 billion for the third quarter, a 45% increase that pushed the company’s stock up 7% in extended trading on Tuesday. The figure surpassed the LSEG consensus estimate of $13.09 billion, marking a clear departure from the recent volatility in the semiconductor sector. Adjusted earnings per share reached $2.09, outpacing the projected $1.95.

The data center segment served as the primary engine for this growth, representing 64% of AMD’s total revenue. This share has expanded dramatically from 47% in the same period last year. CEO Lisa Su stated in a press release that the company anticipates further acceleration in data center processor growth. She cited AMD’s leadership in its product portfolio and deep relationships within the supply chain as key factors in sustaining this trajectory.

The demand for AMD’s central processing units has been fueled by the rise of agentic AI applications. These tools, such as Meta’s Muse, require CPUs capable of powering virtual machines and operating autonomously for extended periods. This specific technical need helped drive AMD shares to a record high in October, even as the stock suffered three consecutive days of losses prior to Tuesday’s rally due to broader industry concerns over AI overspending.

Intel reported similar trends in its own recent results, noting a 78% increase in data center revenue. However, the rival’s stock dropped 29% on Friday following concerns about weak guidance and capacity constraints. Both companies are facing a difficult PC market, which Intel identified as a factor in its poor outlook. Counterpoint Research data shows global PC shipments declined 4% in the second quarter compared to the previous year, driven largely by rising costs for memory and other components.

AMD’s combined PC and gaming segment reported revenue of $3.7 billion, an 8% decrease from a year earlier. Gaming revenue specifically fell by 40%. Despite this contraction in consumer hardware, the company provided optimistic guidance for the fourth quarter. AMD projects revenue of approximately $17 billion, which exceeds the average analyst estimate of $16.2 billion. The company also expects a gross margin of 55%, slightly below the 55.3% average estimate.

In the artificial intelligence hardware market, AMD is expanding its presence with Helios rack-scale systems. These products compete directly with Nvidia’s Grace Blackwell and Vera Rubin offerings. Major technology firms including Meta, Microsoft, Anthropic, OpenAI, and Oracle are beginning to utilize AMD Helios in their data centers. Meta confirmed last week that its Helios racks are operational, and AMD agreed to invest $1 billion in Meta’s equity offering.

AMD has also committed to investing up to $5 billion in Anthropic, which recently unveiled its prospectus ahead of a potential initial public offering. During a visit to Taiwan in October, Lisa Su indicated plans to substantially increase supply in 2027. Both Su and Nvidia CEO Jensen Huang have made multiple trips to Taiwan and South Korea this year to meet with key suppliers, including Taiwan Semiconductor Manufacturing Company, SK Hynix, and Samsung.

In a separate strategic move, AMD announced in September that it would acquire World Labs for $8.2 billion in an all-stock deal. The San Francisco-based AI lab, founded by Fei-Fei Li, is developing a world model that simulates 3D environments to assist in the creation of robots and other physically grounded AI applications.