Advanced Micro Devices spent decades as the smaller rival to Intel in PC processors and, more recently, as the challenger to Nvidia in artificial intelligence accelerators. That framing is wearing thin. The data center now dominates the Santa Clara company's sales, and the latest quarter widened the gap. Revenue climbed 45% from a year earlier to a record $13.4 billion, and Data Center segment sales nearly doubled on demand for EPYC server processors and the newly launched Instinct MI450 GPUs, the company said in its release. The PC and gaming chips that once defined AMD are now the smaller and softer part of the portfolio.
The outlook for the current quarter points the same direction. AMD expects fourth-quarter revenue of approximately $17 billion, plus or minus 3%, with a non-GAAP gross margin of about 55%, according to the release. That would sit slightly below the third quarter's non-GAAP margin. Su said AMD had locked in wafers, packaging, memory and other parts for a much bigger 2027, CNBC reported.
Spending is where the quarter's message sharpens. Fourth-quarter non-GAAP operating expenses are expected to be roughly $3.8 billion, and 2027 expense growth should run at less than half the pace of revenue, which management now expects to climb more than 80%, executives said on the call. Chipmakers call it operating leverage: research and engineering budgets that do not rise with every additional wafer sold. Analysts on the call probed exactly that point, along with whether supply can support the 2027 target and how long PC weakness will last.
The results landed in a jittery market. The quarter and the revenue guide both topped Wall Street consensus, CNBC reported, arriving after a month in which AMD shares had fallen on worries about the scale of AI infrastructure spending, a CNBC analyst roundup noted, and days after Intel's stock tumbled on a weak outlook. Investors there had also questioned whether Intel could meet demand.