AMD forecasts stronger growth as data-center sales surge

AMD expects overall revenue to rise more than 80% in 2027, ahead of analysts’ estimate of 77%, as its data-center business becomes its dominant growth engine. CEO Lisa Su said data-center chips would account for 80% of sales next year. Shares rose 8% in extended trading as the outlook and stronger-than-expected results countered concerns about slowing AI investment.

Third-quarter data-center revenue jumped 97% to a record $8.55 billion, exceeding estimates of $8.20 billion. Overall revenue rose 45% to $13.38 billion, while adjusted profit reached $2.09 per share, beating expectations on both measures. Demand is benefiting from the shift toward running AI models in real-world applications, which requires both graphics processors and central processors.

AMD is expanding beyond standalone chips to challenge Nvidia’s rack-scale systems. Its flagship Helios rack, combining the MI455X accelerator with new Venice server chips, is in production, with a larger ramp-up planned for the fourth quarter. Initial systems are being tested at Meta. A global memory shortage remains an industry constraint, particularly for high-bandwidth memory used in AI processors.

The client and gaming business was weaker, with sales falling 8% to $3.72 billion and missing estimates. AMD expects PC unit shipments to decline by a double-digit percentage next year, although Su said the company would outperform the market.