AMD (AMD) posted its fiscal third-quarter earnings on Tuesday, meeting analysts’ earnings-per-share (EPS) expectations and slightly exceeding revenue projections. The company reported an adjusted EPS of $0.92 on $6.8 billion in revenue, surpassing Wall Street’s $6.7 billion revenue expectation. However, AMD’s Q4 revenue forecast of $7.2 billion to $7.8 billion fell short of Wall Street’s $7.55 billion target, sending shares down by more than 5% as investors raised concerns about slowing AI growth.
Despite the stock dip, AMD CEO Lisa Su remains optimistic about demand. “Looking forward, we see significant growth opportunities across our data center, client, and embedded businesses driven by the insatiable demand for more compute,” she noted.
AMD’s data center business, its largest segment, recorded $3.5 billion in revenue, exceeding the $3.46 billion expected and marking a sharp increase from $1.59 billion last year. The Client segment, which includes desktop and laptop CPUs, generated $1.9 billion, above Wall Street’s $1.71 billion estimate. However, the gaming segment tumbled 69% year-over-year, pulling in $462 million compared to $1.5 billion last year, largely due to declining sales of Radeon graphics cards and custom console chips.
These earnings come shortly after AMD unveiled its latest chips, including the 5th Gen AMD EPYC CPU and the Instinct MI325X AI chip. Over the last 12 months, AMD stock has risen 72%, outpacing the S&P 500’s 41% growth and dwarfing Intel’s 35% decline. Nvidia, AMD’s major AI chip competitor, has surged 246%, holding a 75-90% market share in AI chips.