AMD forecasts revenue above estimates as data centre demand grows

AMD forecast fourth-quarter revenue of US$17 billion (S$21.7 billion), plus or minus 3%, exceeding the average analyst estimate of US$16.3 billion. Strong demand across its data centre portfolio supported the outlook, offering reassurance to investors concerned about the sustainability of AI infrastructure spending. Shares gained about 6% in late trading after the results.

Third-quarter sales rose 45% to US$13.4 billion, while adjusted profit reached US$2.09 a share. Both exceeded analysts’ expectations. Data centre sales nearly doubled to US$8.5 billion, beating forecasts of US$8.2 billion and helping offset weakness in personal computers and gaming.

PC and gaming-related sales shrank 8% to US$3.7 billion. The AI server boom has absorbed memory supplies, pushing up costs for laptops and desktops and weighing on production and demand. AMD also expects its gross margin to narrow to about 55% in the fourth quarter, compared with 56% in the previous period.

AMD is introducing new CPUs and AI accelerators and challenging Nvidia more directly with its Helios server design. It has outperformed Intel in CPUs but remains well behind Nvidia in accelerators used to train and run AI models. Nvidia continues to expand its offerings across software, networking and complete computers.