Advanced Micro Devices Beats Market Estimates as Data Center Revenue Surges

Advanced Micro Devices reported third-quarter revenue that grew 45 percent from a year earlier, driven by surging sales of chips used in data centers. CEO Lisa Su said server revenue should double year over year in 2027 while data center artificial intelligence growth moves even faster than earlier projections. Su noted that the company secured needed supply chain components to back this higher growth.

Market Impact

The stock rose 8 percent in extended trading following the report. Neoclouds like CoreWeave and Nebius stayed higher after the announcement. Rival Intel recently reported strong data center sales too, though its stock dropped over worries about demand. AMD expects fourth-quarter revenue of about $17 billion, beating analyst estimates.

Business Segments

The data center unit now forms 64 percent of overall revenue, up from 47 percent a year ago. Demand for server CPUs grew with the rise of agentic AI apps like Meta's Muse, helping push shares to a record in October. Meanwhile, combined PC and gaming chip revenue fell, with gaming down 40 percent from a year earlier amid a weakening PC market and component costs.

Investments and Plans

AMD is investing up to $5 billion in Anthropic and agreed to invest $1 billion in Meta's equity offering. The company is also buying World Labs for $8.2 billion in an all-stock deal. Su plans to substantially increase supply in 2027 after visits to key suppliers in Taiwan and South Korea.

Context

Advanced Micro Devices designs processors used in personal computers, servers, and artificial intelligence infrastructure. The chipmaker competes closely with rivals like Nvidia and Intel to supply hardware for large cloud providers and AI developers. This report reflects broader industry trends where spending on artificial intelligence data centers remains high despite mixed results in traditional consumer PC markets.