AMD posts record $13.377 billion quarter as data center hits 63% of revenue

AMD now depends more on AI infrastructure spending than on consumer PCs. Buyers get a second large supplier of AI accelerators and server chips. Intel faces a rival growing faster in the same segment. Nobody has settled how long that spending holds.

Record quarter built on data center

Revenue rose 16% sequentially, according to ServeTheHome's reading of the results. Data Center contributed $8.546 billion, up 97% year over year and 27% sequentially, on EPYC demand and the launch of Instinct MI450 GPUs. GAAP operating income was $2.832 billion, net income $2.428 billion and diluted earnings per share $1.46. Non-GAAP EPS was $2.09.

Lisa Su, the chief executive, called it "the largest and most profitable in our history" on Tuesday's earnings call.

AMD said Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running workloads on Helios rack-scale systems powered by its chips. Meta is also AMD's second-largest customer. The Helios racks are being tested there.

Guidance points to a bigger Q4

AMD guided to fourth-quarter revenue of about $17 billion. That would be another record.

Chief financial officer Jean Hu spoke on the call. She said, "Looking ahead of 2027, we actually think our data center business will be more than 80 percent of total company revenue". Su said AMD expects revenue to "grow more than 80 percent in 2027,". She added that "data center will be the largest contributor".

The mix shift shows in the arithmetic. AMD's total revenue rose $1.9 billion in the quarter, and data center revenue rose $1.8 billion.

Gaming and PCs feel the memory squeeze

Client and Gaming combined revenue was $3.722 billion, down 8% year over year. Gaming alone dropped 40% to $773 million. ServeTheHome noted that memory and NAND prices are keeping a lid on that market.

Su said component price increases feed into overall system pricing. AMD is "planning with the current environment for a down year for 2027", she said.

Intel has said it does not expect the memory shortage to improve next year. SK Hynix predicted it will last until 2030, The Verge reported.

Intel comparison and embedded growth

Intel's data center revenue was $7.3 billion in its latest quarter, up 78% year over year. Both companies are seeing surging demand for AI infrastructure. AMD appears to be accelerating.

Embedded revenue was $1.109 billion, up 29% year over year.

Growth came from aerospace and defense, automotive, communications and industrial end markets.

What to watch next

Before the results, AMD shares had fallen about 17% in two days alongside Intel. They were still up more than 120% this year. Analysts expected third-quarter earnings to jump 92% on a 41% rise in revenue, The Next Web reported.

The mood around AI spending is the other risk. Big spenders such as Alphabet and Meta have been punished for spending that eats into cash, The Next Web reported.

"A modest report just won't cut it," said Neville Javeri of Allspring Global Investments, which owns the stock.