AMD's Data Center Sales Nearly Double, Stock Leaps 7% After Hours

Advanced Micro Devices delivered a third-quarter beat on Tuesday, and investors rewarded it fast. The chipmaker's revenue climbed 45% from $9.25 billion a year earlier, while data center sales nearly doubled, according to the company. Shares jumped 7% in after-hours trading.

The data center unit now drives the bulk of AMD's business, making up 64% of total revenue. That's a big leap from 47% a year ago, a shift that shows just how hard the AI buildout has reshaped the company. CEO Lisa Su said in a press release that she expects growth in data center processors to accelerate further, adding that demand won't be a problem to meet. She pointed to AMD's product lineup and its supply chain ties as reasons she's confident about sustaining strong revenue growth and expanding profitability in the years ahead.

The results land just days after Intel posted its own data center surge, with that segment up 78% in the third quarter. But Intel's stock cratered 29% on Friday over soft guidance and doubts about its ability to keep up with demand, a split that makes AMD's reception look even sharper.

AMD's central processing units are enjoying a resurgence as agentic AI apps like Meta's Muse take off. Server CPUs matter here because they run virtual machines and can operate for hours on their own, and that demand helped push AMD's stock to a record in October. The shares are up roughly 125% this year, though they had slid for three straight days before Tuesday's rally amid an industrywide sell-off driven by fears of AI overspending.

Not every corner of the business is glowing. AMD folds PC and gaming chip sales into one segment, and that revenue slipped 8% from a year earlier to $3.7 billion, with gaming alone down 40%. The broader PC market is struggling too: global shipments fell 4% in the second quarter from a year ago as memory and component costs soared, according to Counterpoint Research.

Looking ahead, AMD guided fourth-quarter revenue to about $17 billion, topping the $16.2 billion analysts expected. It sees gross margin at 55%, just under the 55.3% average estimate. The company is also pushing its Helios rack-scale systems against Nvidia's Grace Blackwell and Vera Rubin, with Meta, Microsoft, Anthropic, OpenAI and Oracle starting to deploy them. Meta said last week its Helios racks are running, and AMD agreed to invest $1 billion in Meta's equity offering, plus up to $5 billion in Anthropic, which unveiled its prospectus last week ahead of a potential IPO. Su has also said she plans to substantially increase supply in 2027, and in September AMD agreed to buy World Labs for $8.2 billion in stock.