AMD Q3 Earnings Smash Expectations with $9.25 Billion Revenue, but Q4 Guidance Falls Short of Aggressive Market Hopes

AMD reported third-quarter revenue, profit, and capital expenditures all above expectations.

Key Financials:
Revenue for Q3 reached $9.25 billion, up 36% year-over-year from $6.82 billion and beating analysts’ estimates of $8.74 billion. Gross profit was $4.78 billion, a 40% increase from $3.42 billion a year ago. Gross margin rose to 52%, up 2 percentage points from the same period last year. Operating income was $1.27 billion, up 75% year-over-year from $724 million. Net income reached $1.24 billion, growing 61% from $771 million a year earlier. Earnings per share came in at $0.75, compared to $0.47 last year. Non-GAAP EPS was $1.20, up 30% year-over-year and above the consensus estimate of $1.17.

However, fourth-quarter revenue guidance was not as aggressive as markets had expected, and the company’s data center segment showed some weakness. As a result, AMD shares saw volatile after-hours trading, at one point falling as much as 3.7%. Analysts note that while large AI-related orders continue to materialize, the market remains concerned about the pace of actual revenue conversion, and it’s uncertain whether AMD can leverage its AI pipeline to seriously challenge Nvidia’s dominance. AMD shares experienced further volatility in after-hours trading on Wednesday.