AMD Jumps 7% as Data Center Revenue Nearly Doubles — SkimNews
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- AMD beat third-quarter expectations with adjusted EPS of $2.09 versus $1.95 expected and revenue of $13.38 billion against $13.09 billion expected, up 45% from $9.25 billion a year earlier; the stock jumped 7% in extended trading after three straight down days tied to industrywide fears about AI overspending.
- Lisa Su said AMD expects growth in data center processors to "accelerate further," that meeting demand won't be a problem, and that the company is confident in sustaining very strong revenue growth and expanding profitability over the coming years.
- AMD's data center unit nearly doubled sales from a year earlier and now accounts for 64% of overall revenue, up from 47% a year ago.
- Intel posted comparable data center growth, with segment revenue up 78% in the third quarter, yet its stock plummeted 29% on Friday over weak guidance and doubts about its ability to meet demand.
- AMD's PC-and-gaming segment is still contracting: revenue fell 8% from a year earlier to $3.7 billion and gaming revenue dropped 40%, against global PC shipments declining 4% in the second quarter on soaring memory and component costs.
- AMD guided the fourth quarter to about $17 billion in revenue, above the $16.2 billion LSEG consensus, but set gross margin at 55%, just under StreetAccount's 55.3% estimate.
- Helios, AMD's rack-scale system competing directly with Nvidia's Grace Blackwell and Vera Rubin, is entering data centers at Meta, Microsoft, Anthropic, OpenAI and Oracle; Meta said last week its racks are up and running, while AMD agreed to invest $1 billion in Meta's equity offering and committed up to $5 billion in Anthropic.
Why it matters: Intel posted nearly the same data center growth — 78% in the third quarter — and still lost 29% of its value on weak guidance, so AMD's 7% after-hours jump ultimately rests on Lisa Su's claim that demand won't be a constraint and that about $17 billion of fourth-quarter revenue is deliverable.
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