Advanced Micro Devices reported third-quarter revenue of $13.4 billion on Tuesday, marking a 45% increase from the same period last year. The result set a new company record, primarily fueled by a near-doubling of its data center business. This growth occurred alongside a sharp 40% decline in the gaming segment, which posted $773 million in revenue.
Data Center Growth Outpaces Competitors
The data center segment generated $8.5 billion in revenue, up 97% year over year. AMD attributed this surge to strong demand for its EPYC enterprise server processors and the recent launch of the Instinct MI450 series graphics processing units. Operating margins in this division expanded significantly, rising from 25% to 34%, with operating income jumping 168% to $2.88 billion.
Chief Financial Officer Jean Hu provided guidance for the fourth quarter, projecting revenue of approximately $17 billion, plus or minus 3%. This forecast represents a middle-point estimate of roughly 66% year-over-year growth. The projection relies heavily on the continued acceleration of the data center segment. If AMD meets these expectations, it would surpass Intel in quarterly revenue for the first time in history, as Intel’s own Q4 guidance places its estimates between $15 billion and $16 billion.
Gaming Segment Faces Console Cycle Headwinds
While enterprise sales soared, the gaming division struggled. Revenue dropped 40% compared to the previous year, a decline AMD described as expected given the current stage of the console cycle. The segment includes semi-custom processors supplied to console manufacturers and the company’s Radeon graphics card business. CEO Lisa Su noted that the drop was primarily due to lower semi-custom sales.
The client business, which encompasses desktop and mobile Ryzen processors, showed resilience with $2.95 billion in revenue, a 7% increase year over year. Sales of Ryzen mobile chips led this growth. Meanwhile, the embedded segment, which covers system-on-chips and boards for aerospace, defense, automotive, and industrial markets, reached $1.1 billion, up 29%.
Future Hardware and AI Infrastructure
Alongside the financial results, AMD highlighted upcoming hardware designed for artificial intelligence workloads. The company announced that lead customers, including Anthropic, Meta, Microsoft, OpenAI, and Oracle, have begun bringing their first Helios racks online using the MI455X processor, which started volume shipping this quarter.
AMD also showcased the Threadripper Halo Station, a system pairing a Threadripper 9995WX CPU with up to four Instinct MI350P GPUs. This hardware is designed to run trillion-parameter large language models locally and is scheduled for release in 2027. Additionally, the company introduced Project Zenith, a Windows-based platform built on the Ryzen AI Max+ PRO 495 processor. This system supports up to 192GB of unified memory and can handle 300 billion-parameter models at 4-bit quantization.
Source: Ars Technica
