According to Zhitong Finance APP, after the close of U.S. markets on November 3 Eastern Time, AMD (AMD.US) held its third-quarter fiscal year 2026 earnings conference call. Revenue for the quarter reached $13.377 billion, a 45% year-over-year increase and a record high for a single quarter, surpassing the market expectation of approximately $13.09 billion; non-GAAP diluted earnings per share were $2.09, up 74% year-over-year and exceeding the expected $1.94; GAAP diluted earnings per share were $1.46, including a $1.1 billion non-cash fair value reassessment of warrants. Data center revenue amounted to $8.546 billion, a 97% year-over-year increase, accounting for 64% of total revenue compared to 47% in the same period last year. In terms of stock performance, the share price rose 3.65% to $483.90 during regular trading hours; after the earnings announcement, the stock surged more than 9% in after-hours trading.
The most important information from this earnings call is the significant upward revision of the company’s outlook for 2027. CEO Lisa Su stated that, based on current visibility, revenue is expected to grow by more than 80% in 2027—more than double the growth rate outlined in the long-term financial model presented at the analyst day last November; server revenue is projected to roughly double, while data center AI business growth will significantly exceed doubling, and data center revenue will account for over 80% of total revenue. Supply was the most frequently questioned topic by analysts, with firms such as Barclays and Morgan Stanley pressing on whether wafer, advanced packaging, and memory supply can support such rapid growth. Su responded that current demand indeed exceeds supply, but the company has been jointly planning for years with customers and suppliers to expand capacity in key components including wafers, substrates, advanced packaging, and memory, and expressed “very strong confidence” in the 2027 data center growth outlook. Emarketer analyst Jacob
Bourne believes that this earnings report will encourage investors amid growing scrutiny of AI spending and its returns.
Key points of the call include:
Data center and AI business: Acceleration and convergence. Lisa Su noted that data center revenue growth accelerated quarter-over-quarter each quarter this year; EPYC
Turin has become the most widely deployed EPYC generation, with over 540 public cloud instances, and agentic workloads emerging as a major driver of CPU demand; the next-generation EPYC
Venice has begun shipping, with OEM/ODM partners committing over 240 platforms on the platform; MI455X has started mass shipping, and the first Helios racks for Anthropic, Meta, Microsoft, OpenAI, and Oracle are now live. CFO Hu Jin expects AI revenue from data centers to surpass server CPU revenue for the first time in the fourth quarter.
2027 Outlook: Triple Upgrade.
In addition to revenue growth exceeding 80%, Su Zhuang provided three metrics: server revenue approximately doubled; AI growth in data centers "more than doubled"; and data center revenue accounted for over 80% of total revenue. External commentators such as Huatai and Wall Street View interpreted this as AMD's affirmation of confidence in AI computing demand.
Client and Game: Warning of Pressure on the PC Market.
Customer and gaming businesses totaled $3.7 billion, a year-over-year decline of 8%, with gaming business down 40% year over year. Lisa Su explicitly warned that PC market shipments are expected to decline by double-digit percentages by 2027, primarily due to rising component costs driving up overall device prices and consumer sensitivity to pricing; AMD will focus on high-value segments such as enterprise, premium consumer, and desktop channels, and leverage the interoperability between PC and data center supply chains to flexibly allocate supply.
Supply and Cost: Demand exceeds supply.
Management has confirmed in multiple Q&As that demand exceeds supply and is working with the supply chain to increase capacity in wafers, substrates, advanced packaging, memory, and other areas; regarding price increases in components such as HBM, Hu Jin stated that the company has entered into long-term agreements with certain suppliers and customers and is currently negotiating with clients to jointly share the increased costs.
Q4 guidance: ~27% quarter-over-quarter growth.
The company expects Q4 revenue of approximately $17 billion (±3%), with the midpoint representing a 66% year-over-year increase and a roughly 27% sequential increase, exceeding the market expectation of approximately $16.3 billion; non-GAAP gross margin is approximately 55%, and operating expenses are approximately $3.75 billion; data center revenue increased sequentially by about 50%, while client and gaming revenue declined by more than 20% sequentially, and embedded revenue grew by double digits.
Warrants and capital structure.
Regarding the warrant arrangements with clients such as OpenAI, Hu Jin explained: Revenue guidance has already accounted for the warrants as a deduction based on their fair value at the grant date, requiring no adjustment; dilution occurs only after clients meet vesting and exercise conditions, with clear guidance expected by 2027; quarterly non-cash fair value revaluations do not impact non-GAAP performance or free cash flow. Free cash flow for the quarter was $554 million, with cash and short-term investments totaling $15.8 billion at period-end and total debt at $7.1 billion.
The specific details of the conference call are as follows:
Management Commentary
Matt Ramsay (Vice President, Financial Strategy and Investor Relations): Welcome to AMD
Q3 FY2026 earnings call, noting that this conference contains forward-looking statements subject to risks and uncertainties; please refer to the company’s filings with the SEC. This call discusses non-GAAP metrics; a reconciliation table is available in the company’s earnings press release.
Lisa Su (Chairman and CEO):
AMD delivered its highest revenue and most profitable quarter in history. Revenue for the third quarter was $13.4 billion, a 45% year-over-year increase; non-GAAP earnings per share were $2.09, up 74% year-over-year. Data center business was the primary driver, generating $8.5 billion in revenue, a 97% year-over-year increase, accounting for 64% of total revenue compared to 47% in the same period last year; data center revenue growth accelerated sequentially each quarter this year.
Customer and gaming business revenue amounted to $3.7 billion, a year-over-year decrease of 8%. Client business revenue was $2.9 billion, up 7% year-over-year; gaming revenue was $773 million, down 40% year-over-year. Embedded business revenue reached $1.1 billion, up 29% year-over-year, marking the fourth consecutive quarter of accelerating growth.
Data center CPU: EPYC
Turin has become the most widely deployed EPYC generation in public cloud, with over 540 instance types available. Agentic workloads are emerging as a major driver of CPU demand—Meta’s Muse agent activated over 10 million users within six weeks; OpenAI selected Turin as the host CPU for its first proprietary accelerator platform. The next-generation EPYC
The Venice processors have begun shipping, with OEM/ODM commitments for over 240 platforms, 20% more than Turin during the same period. The company has also launched the Helion rack reference design, a full-CPU rack capable of accommodating 144 Venice processors.
AI in data centers: The MI455X has begun mass shipment, and the first Helios racks for Anthropic, Meta, Microsoft, OpenAI, and Oracle have been deployed and are operational. The company has released ROCm.
10 software stack. EuroHPC has selected systems equipped with MI430X for Europe’s flagship supercomputer, LUMI-AI, scheduled to launch in the second half of 2027. The company also announced the acquisition of Taalas and World
Labs——World Labs was founded by Dr. Fei-Fei Li, a pioneer in AI, who will join AMD as Chief Scientist following the completion of the transaction. Both acquisitions are expected to close by the end of the year.
Based on current visibility, we now expect revenue to grow by more than 80% by 2027, more than double the growth rate outlined in our long-term financial model presented at the analyst day last November. Server revenue is expected to approximately double, while data center AI business growth will significantly exceed doubling, with data centers accounting for over 80% of total revenue.
Hu Jin (Executive Vice President, CFO, and Treasurer):
Non-GAAP gross margin for the third quarter was 56%, an increase of 190 basis points year-over-year. Operating expenses were $3.6 billion, up 29% year-over-year. Operating profit was $3.9 billion, up 75% year-over-year, with an operating margin of 29%, up more than 5 percentage points year-over-year. Data center operating profit was $2.9 billion, up 168% year-over-year, with an operating margin of 34%, compared to 25% in the same period last year.
GAAP earnings per share of $1.46 included a $1.1 billion non-cash fair value revaluation of warrants, primarily reflecting the increase in the company’s stock price and changes in the probability of warrant conditions being met; this item does not affect non-GAAP performance or free cash flow.
Inventory increased by approximately $3 billion quarter-over-quarter to $11.5 billion; operating cash flow was $1.2 billion, and free cash flow was $554 million. Cash and short-term investments at period end totaled $15.8 billion, with total debt at $7.1 billion (including $4.75 billion in senior notes issued in August).
Q4 guidance: Revenue of approximately $17 billion, with a ±3% fluctuation range; the midpoint represents a 66% year-over-year increase and approximately a 27% sequential increase. Data center revenue rose approximately 50% sequentially, with AI revenue from data centers expected to surpass server CPU revenue for the first time; client and gaming combined revenue declined by more than 20% sequentially; embedded revenue grew by double digits sequentially. Non-GAAP gross margin of approximately 55%; operating expenses of approximately $3.75 billion; tax rate of 13%; diluted shares outstanding of approximately 1.67 billion (inclusive of Taalas and World
(Labs acquisition impact).
Q&A Session
Tom O'Malley (Barclays): With over 80% growth projected by 2027, is the supply side (wafers, packaging, substrates, memory) sufficient to support it? If supply were more abundant, would actual demand be even higher?
Lisa Su: Demand exceeds supply. The company has been jointly planning with customers and the supply chain for years and is collaborating to expand capacity in wafers, substrates, advanced packaging, memory, and more. We are very confident about data center growth in 2027.
Tom O'Malley (Barclays): Q4 client sales declined over 20% quarter-over-quarter; how sustainable is the revised PC market outlook for 2027? How will AMD navigate through this downturn?
Lisa Su: Previously anticipated weaker seasonal demand for client business in the second half of the year. Component price increases have raised overall system prices, making the consumer market more price-sensitive. The company is carefully managing inventory, assuming a double-digit decline in the PC market by 2027, and will focus on high-value segments such as enterprise, premium consumer, and desktop channels. The PC and data center supply chains are interchangeable and can be flexibly allocated.
Vivek Arya (Bank of America Securities): For approximately 3 GW
What confidence does AMD have in its financing and infrastructure such as land, electricity, and chassis? How will competitors' flexible products, such as residual value guarantees, impact the competitive landscape by 2028?
Lisa Su: She has strong confidence in the competitiveness of Venice, MI455, and Helios; collaborates with customers on planning to clearly identify which data centers and locations will deploy GPUs. For 2028 and beyond, she will prioritize investing in her own growth (R&D, supply chain) and selectively and strategically co-invest in data center infrastructure with leading partners.
Vivek Arya (Bank of America Securities): How should frontier lab customers choose between developing their own ASICs and AMD products?
Lisa Su: The core is the total cost of ownership (TCO) advantage and tokens per
Dollar (tokens produced per dollar). The Helios rack system represents a major investment by the company; Q3 was the first revenue-generating quarter for both the MI455 and Helios racks, with a significant increase expected in Q4. Following the MI450, MI500 and MI600 are currently in development, deeply co-optimized with the needs of cutting-edge laboratories.
Joshua Buchalter (TD
Cowen): How does the increase in HBM costs affect the Instinct business model? Can the assumption of $15 billion to $20 billion in revenue per GW be maintained? Can costs be passed on to major customers?
Lisa Su: The company has long-term agreements with certain suppliers and customers; memory and other components are facing inflationary pressures, and the company is negotiating with customers to share costs. Despite these inflationary pressures, the company continues to deliver leading TCO for AI workloads.
Joshua Buchalter (TD Cowen): How will operating expenses grow in 2027? Can the 55% gross margin floor be maintained?
Hu Jin: Revenue growth in 2027 will far exceed operating expense growth (OpEx growth will be less than half of revenue growth), driving significant expansion in operating profit margin in 2027. The data center AI business slightly dilutes gross margin, but gross profit will increase substantially; gross margin will fluctuate quarter to quarter due to product mix.
Timothy Arcuri (UBS): What is the dollar breakdown of GPU versus CPU business in data centers for 2027, and what is the annual cadence?
Lisa Su: Server CPU business is expected to nearly double by 2027, while data center AI business will grow “more than double.” Q4 was the first quarter in which data center AI surpassed CPU business in scale, and both will continue to grow thereafter.
Timothy Arcuri (UBS): How will warrants impact the revenue, equity, and expense models?
Hu Jin: Three parts: First, revenue guidance has already been accounted for by deducting warrants at their fair value on the grant date, requiring no further adjustment; Second, dilution occurs only after customers meet vesting and exercise conditions, with clear guidance to be provided in 2027; Third, quarterly non-cash fair value revaluations do not impact non-GAAP performance or free cash flow.
CJ Muse (Cantor Fitzgerald): How is the approximately 100% growth in server CPUs in 2027 composed in terms of shipment volume, core count, and ASP?
Lisa Su: Growth primarily stems from increased shipment volumes and higher core counts, with only a modest increase in ASP (slightly adjusted upward due to higher core counts).
CJ Muse (Cantor Fitzgerald): What is the seasonal outlook for Q1 (clients and data centers)? What about embedded?
Hu Jin: Embedded business typically experiences seasonality in Q1, but it will see significant growth throughout 2027, strengthening quarter over quarter.
Stacy Rasgon (Bernstein): Was the Q4 GPU and CPU business crossover barely met or significantly exceeded?
Hu Jin: MI450 saw a significant quarter-over-quarter improvement; Q4 data center AI revenue, in USD terms, will be substantially higher than server CPU revenue.
Stacy Rasgon (Bernstein): Can the entry and exit rates for gross margin in 2027 serve as indicators?
Hu Jin: We cannot provide guidance on quarterly gross margin because the company’s gross margin is determined by the internal business mix within the data center (AI and CPU), and there is currently insufficient visibility. We recommend using Q4 as the baseline (Q4
The proportion of AI business is much higher than that of CPU, and may vary by quarter in 2027.
Joe Moore (Morgan Stanley): How does the Helion rack (CPU-only version) differ from traditional racks for agent workloads? Is there an opportunity for GPU blades to be attached?
Lisa Su: Helion racks are optimized for deployment environments—hyperscale cloud environments use high-density, CPU-only configurations (Venice offers industry-leading performance per socket), while enterprise markets can adopt CPU+GPU hybrid configurations. The company has contributed open-source designs to OCP, and feedback from OEMs, ODMs, and customers has been very positive.
Joe Moore (Morgan Stanley): Will the doubling of server growth by 2027 be due to increased market share or expansion of the industry’s total addressable market? Will it meet backlog demand or reflect ongoing shortages?
Lisa Su: Growth comes from both market share gains and TAM expansion—including traditional cloud and enterprise markets, agent CPUs, and head
Three areas of node. Demand indeed exceeds supply; the company is working with its supply chain to expand supply (including components such as substrates and DDR5); demand stems from broad expansion across its entire customer base, not driven by individual customers.
Harsh Kumar (BMO Capital Markets): What is the target market share for the Helios rack system? Are you entering the enterprise market?
Lisa Su: Our goal is to become a key compute provider for our largest customers (cutting-edge labs and hyperscale cloud providers); we are in deep discussions with our largest customers regarding the MI500 and MI600. Enterprise market growth has been slower but is crucial; the company has launched enterprise-specific GPUs and aims to expand its enterprise footprint.
Harsh Kumar (BMO Capital Markets): If competitors lower prices on PC, will AMD follow suit?
Lisa Su: The company remains committed to an end-to-end AI strategy (from cloud to edge to client); it discipline-focused on the highest-value, most profitable PC segments (enterprise, premium consumer, and desktop channels), with minimal exposure to low-end, price-sensitive segments.
Moderator: Due to connectivity issues, the scheduled question from Goldman Sachs' Jim Schneider could not be connected. The meeting will proceed with BMO's Harsh
Kumar's question concludes.