AMD stock climbs after Q4 revenue guide of $17bn beats expectations

AMD's guidance added to a robust evening for the AI hardware trade, landing alongside Super Micro's earnings beat and raised outlook, which may support chip and server names in the next session. The size of the fourth-quarter increase will sharpen the comparison with Nvidia, as AMD positions Helios as a direct rack-scale rival. The slightly lower margin guide is unlikely to spoil the reaction on its own. It is still a reminder that volume growth in AI accelerators may come at some cost to profitability, which investors will weigh as the ramp scales.

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AMD delivered a slight beat for the quarter but forecast a substantial jump in the next one, betting that its Helios AI racks can become the growth engine investors have been waiting for.

Summary:

• Third-quarter revenue was around $13.4bn, ahead of the roughly $13.1bn expected and up about 53% from a year earlier
• Adjusted EPS was about $2.10, against forecasts near $1.95
• Adjusted operating margin was 29%, against expectations of 28%, with adjusted gross margin of 56%
• Fourth-quarter revenue guidance is around $17bn, above expectations of about $16.3bn
• Fourth-quarter adjusted gross margin guidance is 55%, slightly below the 55.5% expected
• AMD expects growth to accelerate as Helios and Venice production scales
• Shares rose in after-hours trade

Advanced Micro Devices shares gained in extended trading after the chipmaker beat third-quarter forecasts and guided fourth-quarter revenue well above expectations. It said growth should accelerate further as it ramps production of its Helios AI rack system and next-generation Venice server processors.

According to the company's results, revenue came in at around $13.4bn, ahead of expectations of about $13.1bn and above the roughly $13bn midpoint of its own guidance. That compares with about $8.8bn a year earlier, a gain of roughly 53%. Adjusted earnings per share were about $2.10, against forecasts near $1.95. Adjusted net income reached around $3.5bn, compared with expectations of about $3.2bn.

Profitability also edged ahead of forecasts. Adjusted operating income was around $3.9bn, above the roughly $3.7bn expected, giving an adjusted operating margin of 29% against forecasts of 28%. On a reported basis, operating income was about $2.8bn. Adjusted gross margin was 56%, in line with the company's guidance, while the reported gross margin was 54%. Capital spending of around $650m was in line with expectations.

The outlook is the headline. AMD expects fourth-quarter revenue of around $17bn, against expectations of about $16.3bn. That would mark a rise of roughly 27% from the third quarter, a sharp step-up for a company of its size. Helios is AMD's rack-scale AI platform built around its MI450 accelerators. Management has previously described Meta, OpenAI and Anthropic as anchor customers for multi-gigawatt deployments.

The one softer detail is margin. AMD guided fourth-quarter adjusted gross margin to 55%, slightly below expectations of 55.5% and a touch lower than the third quarter. Analysts had flagged that AI accelerators carry lower margins than the company average, so a faster Helios ramp may dilute gross margin even as revenue climbs.

Investors will look to the earnings call for detail on the pace of the Helios ramp, on supply constraints in memory and advanced packaging, and on visibility into AI demand for 2027.