- AMD grew third-quarter revenue 45% to a record $13.4 billion as data center sales nearly doubled.
- AMD forecasts fourth-quarter revenue of $17 billion (plus or minus 3%), topping the average analyst estimate of $16.3 billion.
- Shares rose about 6.5% in after-hours trading, later up about 8% in late trading.
- AMD expects growth to speed up to roughly 66% next quarter, but it is spending heavily to get there.
- Data Center revenue reached $8.5 billion, up 97% year over year.
AMD anticipates a remarkable 66% growth in Q4 revenue, reaching approximately $17 billion, fueled by robust demand for AI chips. This follows a strong Q3 where the company reported $13.4 billion in revenue, a 45% increase year-over-year, with data center revenue soaring 97% to $8.5 billion.1236
Despite this growth, AMD is facing challenges, including a free cash flow drop to $554 million from $1.5 billion, and a significant increase in debt, more than doubling since June. The company is investing heavily in inventory, adding about $3 billion to support its upcoming Helios rack systems and Venice chips.
The GAAP profit was impacted by a $1.1 billion hit related to warrants issued to customers, yet the GAAP operating margin improved by 7 points from the previous year. Analysts had expected lower revenue, with estimates around $16.3 billion, making AMD's forecast a significant positive surprise that contributed to a 6.5% rise in shares during after-hours trading.
“AMD added about $3 billion of inventory while building Helios rack systems, and its free cash flow fell to $554 million from $1.5 billion. GAAP profit took a $1.1 billion hit from warrants issued to certain customers.”
