Advanced Micro Devices reported third-quarter revenue of $13.4 billion on Monday, a 45% jump from a year earlier, as sales of its AI accelerators and server processors surged and the company lifted its outlook for the final quarter of the year. Shares of the chipmaker rose more than 9% in after-hours trading.
The results, detailed in a filing with the Securities and Exchange Commission, showed AMD's data-center segment generating $8.5 billion in revenue, up 97% from the same period last year, as cloud providers and AI labs kept buying its Instinct graphics processors and Epyc server chips. Gross margin came in at 54% on a GAAP basis, or 56% on an adjusted basis, and the company posted GAAP net income of $2.4 billion, or $1.46 a share.
A Fourth-Quarter Boost
AMD told investors to expect roughly $17 billion in revenue for the current quarter, give or take 3%, a figure that would mark about 66% growth from the same period last year and a 27% jump from the third quarter. Chief Executive Lisa Su said data-center sales "nearly doubled year-over-year," underscoring how central AI infrastructure spending has become to the company's growth story even as its personal-computer and gaming businesses cooled; client and gaming revenue fell 8% from a year earlier, dragged down by a 40% drop in gaming-chip sales.
The report landed in the middle of a market session that had been dominated by worries over whether the enormous capital spending by hyperscalers and AI labs can be justified by revenue. Those concerns had weighed on chip and server stocks in recent sessions. AMD's beat, alongside a similarly strong report from server maker Super Micro Computer the same day, helped the Nasdaq Composite add 0.83% on Monday even as the Dow Jones Industrial Average slipped, according to a market wrap from The Motley Fool.
Reaction and What Comes Next
Analysts who cover the chip sector said the quarter should quiet, at least for now, fears that AI infrastructure spending was due for a slowdown. AMD has positioned its MI350 series, and an upcoming MI400 line, of AI accelerators as a credible alternative to Nvidia's dominant chips, and the company has signed multiyear supply agreements with several large cloud computing customers over the past year to lock in demand.
Still, some of that optimism is already priced into AMD's stock, which has more than doubled over the past twelve months. The company's next test comes when it reports fourth-quarter results early next year, and investors will be watching closely for any signs that hyperscalers are pulling back on capital spending commitments for 2027, after a stretch of quarters in which they have consistently raised guidance instead.
For now, Monday's numbers offered a rebuttal to skeptics who have warned that the AI buildout resembles a bubble: two of the sector's largest hardware suppliers each beat already-elevated expectations in the same session, suggesting demand for AI computing capacity has yet to slow.
