AMD Lifts Fourth-Quarter Revenue Outlook on Strong AI Chip Demand; Shares Jump 6% After Hours

Advanced Micro Devices issued a fourth-quarter revenue forecast that topped Wall Street estimates, buoyed by solid demand from AI data centers.

According to Bloomberg on November 3, AMD expects fourth-quarter revenue of about $17 billion. That is above the $16.3 billion average analyst estimate. The company said actual revenue could vary by about 3% from that forecast.

AMD’s upbeat outlook comes after a sharp selloff in technology stocks fueled by concerns that AI investment may be overheating. Investors have increasingly questioned whether massive spending on AI infrastructure can be sustained, but AMD underscored that demand for data-center semiconductors remains firm.

Chief Financial Officer Jean Hu said the fourth-quarter outlook reflects accelerating revenue and profit growth driven by strong demand across the company’s data-center product portfolio. AMD shares rose about 6% in after-hours trading following the earnings release.

Third-quarter results also topped market expectations. AMD reported revenue of $13.4 billion, up 45% from a year earlier, and adjusted earnings per share of $2.09. That beat analyst estimates of $13.1 billion in revenue and $1.97 a share in adjusted EPS.

Data-center revenue reached $8.5 billion, nearly double the level a year earlier. That also exceeded the $8.2 billion market forecast. Revenue from the PC and gaming businesses, by contrast, fell 8% to $3.7 billion. Higher semiconductor prices driven by surging demand for memory used in AI servers have weighed on the PC market, the report said.

Profitability, however, may come under some pressure. AMD forecast fourth-quarter gross margin of about 55%, down from 56% in the prior quarter. Higher production costs could weigh on margins even as the data-center business continues to expand.

AMD is rolling out new central processing units and AI accelerators while using its Helios server design to step up competition with Nvidia. Nvidia still dominates the market for accelerators used to train and run AI models, leaving AMD’s ability to gain market share as a key challenge.