Chipmaker AMD forecasts Q4 revenue above estimates on strong data center demand; shares rise
Overview
US chipmaker's Q3 revenue rose 45% yr/yr, beating analyst expectations
Adjusted EPS for Q3 grew 74% yr/yr, beating analyst expectations
Data Center segment revenue nearly doubled, offsetting declines in Gaming
Shares of the company rose about 7% after the bell
Outlook
AMD expects Q4 revenue of approximately $17 bln, plus or minus 3%, implying midpoint growth of about 66% YoY and about 27% sequentially, vs analysts' estimate of $16.23 bln
Company sees Q4 2026 non-GAAP gross margin at about 55%
AMD expects accelerating revenue and earnings growth in Q4, driven by strong Data Center demand
Result Drivers
DATA CENTER DEMAND - Co said record Data Center segment revenue was driven by strong demand for EPYC processors and launch of Instinct MI450 Series GPUs
CLIENT SEGMENT GROWTH - Co said Client segment revenue rose 7% yr/yr, supported by sales of Ryzen mobile processors
GAMING SEGMENT DECLINE - Co said Gaming segment revenue fell 40% yr/yr due to lower semi-custom and graphics revenue
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Beat | $13.38 bln | $13.09 bln (37 Analysts) |
Q3 Adjusted EPS | Beat | $2.09 | $1.95 (38 Analysts) |
Q3 EPS | $1.46 | ||
Q3 Adjusted Net Income | Beat | $3.47 bln | $3.21 bln (33 Analysts) |
Q3 Net Income | $2.43 bln | ||
Q3 Gross Margin | 54.00% |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 47 "strong buy" or "buy", 9 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the semiconductors peer group is "buy"
Wall Street's median 12-month price target for Advanced Micro Devices, Inc. is $631.00, about 35.2% above its November 2 closing price of $466.84
The stock recently traded at 32 times the next 12-month earnings vs. a P/E of 43 three months ago
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For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)