Advanced Micro Devices projected fourth-quarter revenue of $17 billion, plus or minus 3%, topping the $16.3 billion average analyst estimate and sending shares up about 6% in late trading. The outlook is the latest signal that hyperscaler spending on AI infrastructure has not cracked, even after a rough October for semiconductor stocks. AMD has more than doubled in 2026 and briefly joined the trillion-dollar valuation club in September, a milestone that owes almost entirely to the data centre franchise Lisa Su has built.
Data centre doubles while PC stalls
Third-quarter sales rose 45% to $13.4 billion, with adjusted profit of $2.09 a share against expectations of $13.1 billion and $1.97. The data centre segment nearly doubled to $8.5 billion, beating the $8.2 billion consensus, while the combined PC and gaming business shrank 8% to $3.7 billion. Memory demand from AI servers has tightened supply for client devices and pushed up costs, a dynamic that hammered Intel last week and is now visible in AMD’s numbers too.
Margin pressure appears
Gross margin is guided to roughly 55% in the fourth quarter, down from 56% in the prior period. The compression reflects a mix shift toward lower-margin accelerator volume and higher input costs, a trade-off the market has so far been willing to accept while top-line growth accelerates. Jean Hu, the chief financial officer, described the outlook as reflecting accelerating revenue and earnings growth across the data centre portfolio.
The Nvidia gap remains
AMD’s data centre revenue is now roughly twice what it was two years ago, and the company has been taking share from Intel in traditional CPUs. In AI accelerators, however, Nvidia still dominates the training and inference installed base, and its product cadence, spanning silicon, networking, software and full rack systems, has only accelerated. AMD’s Helios server design and new CPU and accelerator roadmaps are the intended answer, but the gap in ecosystem maturity is not a single product cycle problem.