Advanced Micro Devices (AMD) reported third-quarter earnings that surpassed Wall Street's expectations, with adjusted earnings per share of $2.09 compared to the anticipated $1.95, and revenue of $13.38 billion, exceeding the $13.09 billion forecast. This represents a 45% increase in revenue from $9.25 billion a year earlier.
CEO Lisa Su expressed confidence in the company's ability to meet growing demand for data center processors, which now account for 64% of AMD's overall revenue, up from 47% a year ago. This growth comes in the context of a broader industry trend, as Intel also reported a 78% increase in its data center revenue, although it faced a significant stock drop due to weak guidance.
AMD's stock has surged approximately 125% this year, although it recently experienced a brief decline amid concerns over AI spending. The company anticipates fourth-quarter revenue of about $17 billion, surpassing the $16.2 billion analyst average, with a gross margin expectation of 55%.
Additionally, AMD is investing heavily in AI, with commitments of up to $5 billion in Anthropic and a $1 billion investment in Meta's equity offering. These strategic moves, along with the acquisition of World Labs for $8.2 billion, position AMD favorably in the competitive landscape against Nvidia and other tech giants