Revenue and earnings exceed expectations
Advanced Micro Devices (AMD) reported third-quarter earnings that surpassed Wall Street expectations, although margin guidance remained in line with forecasts. Despite the strong performance, shares dipped slightly in after-hours trading.
The chipmaker posted adjusted earnings per share of $1.20, ahead of the expected $1.16. Revenue rose 36% year-over-year to $9.25 billion, also beating the $8.74 billion consensus. Net income climbed to $1.24 billion, or 75 cents per share, up from $771 million, or 47 cents per share, a year earlier.
Q4 outlook suggests continued growth
For the fourth quarter, AMD forecasted $9.6 billion in revenue, which would mark 25% growth and surpass analyst expectations of $9.15 billion. The company also projected an adjusted gross margin of 54.5%, in line with market estimates.
Notably, the outlook excludes potential revenue from Instinct MI308 chip shipments to China, consistent with prior quarter statements. AMD remains focused on competing with Nvidia in the AI processor space.
AI partnerships strengthen AMD’s position
In October, AMD announced a strategic deal with OpenAI, allowing the AI company to acquire a 10% stake and deploy up to 6 gigawatts of Instinct GPUs over several years. The initial rollout will begin in the second half of next year with 1 gigawatt of chips.
Oracle also revealed plans to deploy 50,000 AMD Instinct MI450 AI chips in its cloud infrastructure starting in 2026, reinforcing AMD’s position in the high-performance AI market.
Segment results and Amazon divestment
The data center segment delivered $4.34 billion in revenue, up 22% year-over-year, beating estimates. Client revenue climbed 46% to $2.75 billion, and gaming revenue surged 181% to $1.30 billion, both exceeding analyst forecasts.
Meanwhile, Amazon disclosed it sold all 822,234 AMD shares it held as of September 30, exiting a position it opened earlier this year. As of Tuesday’s close, AMD stock had risen 107% year-to-date, compared to a 21% gain in the Nasdaq.
