AMD guides fourth quarter to $17 billion as Intel's PC warning lingers

The guide landed after a rough month for the stock. AMD shares had fallen roughly 30% since the previous month, according to LYNX Equity Strategies.

For PC buyers, the practical effect is that system prices stay high. Intel says the client slowdown runs through at least the first half of 2027. It also says memory pricing pressure persists into 2027. For AMD investors, the test is whether data center sales can outrun a client business its rival has just written down. Data center sales were 58% of second-quarter revenue. The guide does not break out how much rests on Instinct accelerators rather than EPYC server processors.

AMD guides above the Street

The fourth-quarter guidance was $17 billion, plus or minus 3%. That compared with an average analyst estimate of $16.3 billion.

Ahead of the report, Wall Street was looking for earnings of $1.95 a share against $1.20 a year earlier, on revenue of roughly $13 billion. That would have been about 41% annual growth, with adjusted gross margin near 56%, flat on the prior quarter. AMD had guided to that top line, give or take $300 million.

The comparison base is a record second quarter. Revenue climbed 50% to $11.5 billion. Data center revenue more than doubled to $6.7 billion, and that segment made up about 58% of companywide sales. Commitments behind the AI line are large. OpenAI and Meta Platforms have each signed for 6 gigawatts of AMD Instinct GPUs. Anthropic signed for up to 2 gigawatts. AMD is putting up to $5 billion into Anthropic as part of that agreement.

The client half of the portfolio

Intel's Client Computing and Physical AI Group reported $8.1 billion in revenue for the September quarter, down 5% from a year earlier. The company guided the December quarter to $15 billion to $16 billion. It guided a non-GAAP gross margin of 38%, down from 44.1%.

Intel chief financial officer David Zinsner said the PC slowdown should continue through at least the first half of 2027. Intel blamed industry-wide memory shortages that push system costs up and hurt demand. That is the hinge between the two halves of the chip business. Memory prices are lifting SK Hynix and weighing on PC volumes.

AMD closed Friday at $504.80, down 10.88%, after Intel's outlook. Intel fell 28.6% and the Philadelphia Semiconductor Index lost more than 7%.

Memory sets the price of everything else

SK Hynix reported operating profit of 83.3 trillion won for the July-to-September quarter, against 11.4 trillion won a year earlier. Revenue was 104.6 trillion won, up about 328%. That worked out to an 80% operating margin, and the shares rose more than 9%.

The company said DRAM capacity was sold out through 2029. It also said the AI memory shortage will persist through 2030. Adoption is spreading beyond cloud providers to enterprises, robotics and autonomous driving. Morningstar estimates that HBM4 is priced 50% higher than HBM3E. RBC Capital Markets analyst Srini Pajjuri sees a credible path for the cycle to extend another five quarters.

Memory is now the swing factor in system pricing. Intel's client guidance and SK Hynix's margins are two ends of the same trade.

SK Hynix announced about 100 trillion won, roughly $75 billion, in shareholder returns for 2026. Earnings and gains from its Kioxia stake will fund the returns.

Intel's split screen

The other Intel is growing fast. Data Center and AI group revenue rose 78% to $7.3 billion. That was the strongest growth in that business in 15 years. Segment operating income was $3.0 billion at a 41.5% margin.

Substrate shortages were limiting how many server processors Intel could ship. That constraint is expected to last into the first half of 2027. Every server chip Intel cannot ship is a sale AMD can compete for. Data center was already more than twice the size of AMD's client business last quarter. Foundry revenue rose 58% to $6.7 billion, but the segment still posted a $1.9 billion operating loss. On a GAAP basis, net income attributable to Intel fell 18% to $3.3 billion, or $0.60 a diluted share, from $4.1 billion, or $0.90. Intel also completed a $23 billion public equity offering during the quarter. It announced plans to acquire quantum software platform Classiq.

What to watch

The hardware behind AMD's AI commitments is Helios. It is a rack that packs 72 Instinct MI455X accelerators and EPYC processors into 18 compute trays with 31 terabytes of HBM4 memory. Production shipments began in September.

The first gigawatt of Anthropic's committed capacity is due in the first half of 2027. AMD's Venice server chip is the first high-performance computing product in production on TSMC's 2-nanometer process. The manufacturing base sits in Taiwan. The pace of the Helios buildout depends on wafer and packaging capacity as much as on AMD's execution.

LYNX Equity Strategies said it would not be surprised if AMD's 70% server CPU growth outlook for 2027 proved conservative.

The same note flagged the coming Anthropic IPO as a potential overhang for the shares. For now the guide stands, and Intel's PC warning stands with it.