AMD Guides Q4 Revenue to $17 Billion as Data-Centre Sales Double

AMD forecast fourth-quarter revenue of about US$17 billion, plus or minus 3 per cent, beating the Wall Street consensus of US$16.23 billion compiled by LSEG. The guidance, issued on Tuesday, Nov 3, pushed AMD shares up more than 7.5 per cent in extended trading. The stock has more than doubled so far this year.

The rally carried the broader sector with it. Intel shares rose 2 per cent, Nvidia climbed more than 1 per cent, and Broadcom advanced 1.2 per cent. AMD's numbers arrive one week after Intel guided quarterly revenue well below estimates and triggered a global selloff in chip stocks. The contrast is hard to miss.

What drove the beat?

Third-quarter revenue rose 45 per cent to US$13.38 billion, above estimates of US$13.09 billion. Data-centre revenue nearly doubled, jumping 97 per cent to a record US$8.55 billion against an expected US$8.20 billion. Adjusted profit reached US$2.09 per share, ahead of the US$1.95 analysts had modelled.

Demand for AMD's graphics processing units and central processors is accelerating as AI workloads shift from training models toward running them in real-world applications. That shift has allowed AMD to capture market share from Intel, whose client business remains under pressure.

Not every segment performed. The client and gaming segment, home to AMD's PC chips and console processors, fell 8 per cent to US$3.72 billion, missing estimates of US$3.79 billion. The data centre carried the quarter.

What comes next on margins and racks?

AMD expects an adjusted gross margin of about 55 per cent for the fourth quarter, in line with the 55.27 per cent analysts expected and down from 56 per cent in the third quarter. Growth, in other words, has a price.

The company has also moved beyond standalone chips to compete with Nvidia's rack-scale systems. Its flagship Helios rack, combining the MI455X accelerator with new "Venice" server chips, is in production and set for a larger ramp-up in the fourth quarter. Meta is testing the initial systems.

The Meta relationship runs deeper than a trial. In February, AMD agreed to sell up to US$60 billion worth of AI chips to Meta over five years, in a deal that allows the Facebook owner to purchase as much as 10 per cent of the chip firm.

What about supply and the AI bet?

The industry backdrop is not entirely friendly. A global memory shortage has left the expensive high-bandwidth memory used in AI processors in scarce supply while manufacturers race to increase production. How quickly that eases will shape how much of AMD's ramp the market can absorb.

AMD is also spending on capabilities beyond silicon. In September, the company agreed to buy Fei-Fei Li's World Labs, a startup building AI that models 3D environments, for US$8.2 billion in stock, gaining a foothold in research on physical AI systems.

With Helios ramping, Meta committed, and data-centre revenue compounding at 97 per cent, AMD enters the fourth quarter with momentum Nvidia cannot ignore.