World

Muse

Vera

AMD shares shot up more than 6% Tuesday night after the chipmaker said its data center business grew 97% in the third quarter.
The AMD stock surged by as much as 8% after hours as investors got the numbers they wanted: bigger AI sales, higher profits, and a forecast that topped Wall Street’s expectations.
Revenues jumped 45% to $13.38 billion from $9.25 billion last year. The analysts, who were surveyed by LSEG, were expecting revenues of $13.09 billion. Earnings per share hit $2.09, topping the estimate of $1.95.
The rally came at an interesting time. AMD had fallen for three straight sessions as investors questioned whether Silicon Valley was throwing too much money at AI infrastructure. Even with that wobble, the stock is up roughly 125% this year.
<h2 id="amd-s-server-business-is-doing-the-heavy-lifting">AMD’s server business is doing the heavy lifting</h2>
The share of revenue contributed by data centers to the entire sales of AMD has risen from 47% last year to 64%. This is a different scenario for a company that is predominantly known for its PC processors.
<a href="https://ir.amd.com/news-events/press-releases/detail/1303/amd-reports-third-quarter-2026-financial-results" rel="noopener noreferrer nofollow">According</a> to the CEO Lisa Su, the revenue contribution from servers will double next year while that from AI-driven data centers will increase even faster than anticipated three months ago.
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 “We have worked across our supply chain to secure the wafers, substrates, advanced packaging, memory, and other key components needed to support much higher growth next year,” Lisa said during the earnings call.
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There is another twist in the AI chip race. Nvidia (NVDA) still dominates the market for AI graphics processors, but AMD is finding more customers for its traditional server CPUs. Those chips help run the virtual machines behind agentic AI, software that can handle tasks independently for hours. Meta’s Muse is one example. Demand tied to these agents helped lift AMD stock to a record in October.
<blockquote>
 “Adoption is just starting, and we expect demand to grow sharply as agents are deployed more broadly and take on more complex work,” Lisa told analysts.
</blockquote>
AMD’s Helios systems integrate AI chips in entire server racks and compete with Nvidia’s Grace Blackwell and Vera Rubin architectures. The companies using this technology include Meta, Microsoft, Anthropic, OpenAI, and Oracle. As reported last week by Meta, its Helios racks have gone live already, and AMD invested in the company’s equity deal for up to $1 billion.
Furthermore, AMD has invested $5 billion into Anthropic, a company that filed a prospectus for IPO just last week.
<h3 id="pc-weakness-hasn-t-disappeared-and-chip-supply-still-matters">PC weakness hasn’t disappeared, and chip supply still matters</h3>
Not every corner of AMD’s business is growing. Revenue from its combined PC and gaming division fell 8% to $3.7 billion, with gaming sales alone down 40%.
The computer market is struggling too. Counterpoint Research estimated that global PC shipments dropped 4% in the second quarter because memory and other parts have become more expensive.
AMD and Intel manufacture x86 processors for desktops and laptops. The two also go up against each other in competition with the Arm designs used by companies like Apple and Qualcomm.
However, despite reporting an increase of 78% in sales of data center equipment in its most recent quarter, Intel’s stock price fell 29% in a single day.
For the fourth quarter, AMD expects around $17 billion in revenue, ahead of the $16.2 billion analysts projected. Its expected 55% gross margin is a little below the 55.3% StreetAccount estimate. So the sales outlook impressed investors, even if profitability was not quite where analysts wanted it.
Making enough hardware is now a major part of the challenge. During an October trip to Taiwan, Lisa said AMD planned to “substantially increase our supply in 2027.”
She and Nvidia CEO Jensen Huang have repeatedly visited Taiwan and South Korea this year to meet suppliers including TSMC, SK Hynix, and Samsung.
AMD is expanding beyond chips as well. In September, it announced an $8.2 billion all-stock deal to buy World Labs, the San Francisco AI company founded by researcher Fei-Fei Li. Its technology builds simulated three-dimensional environments to help develop systems that interact with the physical world, including robots.
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AMD stock surges over 7% as AI chip boom drives 97% growth in data center sales

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