AMD Beats Q3 Estimates as Data Center Revenue Nearly Doubles, Guides Q4 to About $17 Billion

AMD reported record third-quarter revenue of $13.38 billion on Tuesday, up 45% from $9.25 billion a year earlier, with adjusted earnings of $2.09 per share. Both topped the LSEG consensus of $13.09 billion and $1.95. The bigger number was the outlook: AMD guided fourth-quarter revenue to about $17 billion, plus or minus 3%, against an LSEG average estimate of roughly $16.2 billion. Shares, which had closed the regular session up 3.7% at $483.90 ahead of the report, rose more than 8% in extended trading.

Data center carried the quarter. Segment revenue rose 97% to a record of about $8.5 billion, ahead of the $8.20 billion LSEG estimate cited by Reuters, and the segment now makes up 64% of AMD's revenue, up from 47% a year ago. CNBC noted that AMD's server CPUs are seeing a resurgence as agentic AI applications spread, and Lisa Su told analysts that "adoption is just starting." Meta, Microsoft, Anthropic, OpenAI and Oracle are all beginning to use AMD's Helios rack-scale systems. Su also said AMD now expects revenue to grow more than 80% in 2027.

The soft spots sat outside the data center. Client and gaming revenue fell 8% to $3.7 billion, with gaming down 40% year over year, slightly under the $3.79 billion LSEG estimate. AMD guided fourth-quarter gross margin to about 55%, a touch below the 55.3% StreetAccount estimate. Cash generation also lagged the top line: free cash flow was $554 million, about 4% of revenue. On the call, CFO Jean Hu attributed that to working-capital investment, including an inventory build of roughly $3 billion to $11.5 billion to meet data center demand, plus ongoing capital spending.

What to watch: whether the Helios ramp can carry data center growth toward Su's 2027 target, and whether the inventory build converts into revenue rather than weighing on cash flow. The report follows an industrywide sell-off tied to fears of AI overspending, during which AMD fell for three straight sessions before Tuesday's rebound. With the stock still up about 125% this year, the guidance has a high bar to clear.