AMD sales jump 45% as AI demand fills its data centers

AMD, the chip company, reported third-quarter sales of $13.38 billion on Tuesday, up 45% from a year earlier. Wall Street expected $13.09 billion. The big driver was data centers, the warehouses of computers that run AI and online services. Its stock rose more than 7% in after-hours trading.

What changed

Data center sales nearly doubled, up 97% to $8.5 billion. That unit now makes up 64% of AMD's revenue, up from 47% a year ago. A year earlier, total revenue was $9.25 billion.

Much of the lift comes from server processors, called CPUs. These are the general-purpose chips that act as a computer's brain. They matter more now because of agentic AI, meaning AI apps that carry out tasks on their own, sometimes for hours. AMD's server chips run the virtual machines those apps need.

The outlook

For the fourth quarter, AMD expects about $17 billion in revenue. Analysts had predicted $16.2 billion. It expects a gross margin of 55%, slightly below the 55.3% analysts expected. Gross margin is the share of sales left after the direct cost of making products.

CEO Lisa Su said growth in data center processors should accelerate further. She said AMD is confident it can sustain very strong revenue growth. In October, she said AMD plans to substantially increase its supply in 2027.

Where PCs and gaming fit

The picture is weaker for everyday devices. AMD reports PC chips together with gaming chips, and that business fell 8% to $3.7 billion. Gaming revenue alone dropped 40%.

Counterpoint Research says global PC shipments fell 4% in the second quarter from a year earlier. It blames soaring costs for memory and other parts. Intel also pointed to the weak PC market when it gave a poor outlook last week. Shoppers may want to keep an eye on laptop and desktop prices.

The wider AI race

AMD also sells AI graphics chips and full server racks called Helios, which compete with Nvidia's products. Meta, Microsoft, Anthropic, OpenAI and Oracle are all beginning to use Helios. Meta said its Helios racks are up and running. AMD agreed to invest $1 billion in Meta's equity offering and up to $5 billion in Anthropic.

Intel reported 78% data center growth last week, but its stock fell 29% on Friday over weak guidance and concerns about meeting demand. AMD's stock is up about 125% this year. It had fallen three days in a row before Tuesday, during an industry sell-off tied to fears of overspending on AI.

What happens next

AMD said in September it would buy World Labs for $8.2 billion in stock. World Labs is an AI lab building models that simulate 3D environments. The next test is whether AMD can supply enough chips to match demand.