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Chipmaker AMD forecasts Q4 revenue above estimates on strong data center demand; shares rise

By Reuters News


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


Reuters Recommended Reads

  • Nov 3 - Samsung to make AMD, Nvidia chip parts at second Texas plant, Maeil Business reports

  • Nov 2 - Lattice Semiconductor Q3 revenue more than doubles on AI-driven FPGA demand, AMI acquisition

  • Nov 2 - Israel's Tower Semi Q3 revenue growth of 33% tops estimates, sees faster Q4 growth


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.)

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