Advanced Micro Devices reported the biggest quarter in its history on Tuesday, powered by data centers being built for artificial intelligence. Third quarter revenue reached a record $13.4 billion, up 45 percent from a year earlier, and Data Center sales nearly doubled. The results, reported by AMD on November 3, cover the quarter ended September 26, 2026.
“We delivered a record quarter with revenue exceeding the high end of our guidance as Data Center segment sales nearly doubled year-over-year,” said Dr. Lisa Su, AMD’s chair and CEO, in the company’s earnings release.
Profit rose with sales. Net income was $2.4 billion on a GAAP basis, or $1.46 per share, up 95 percent from a year earlier. On the adjusted, or non-GAAP, basis that strips out one-time items, earnings were $2.09 per share, up 74 percent.
Data Center carried the quarter
Data Center revenue was a record $8.5 billion, up 97 percent from a year earlier. The segment now brings in roughly two of every three dollars AMD earns. AMD said the growth came from strong demand for its EPYC server processors and from the launch of its Instinct MI450 Series graphics processors. The segment also beat Wall Street expectations. Reuters reported Data Center revenue of $8.55 billion, above the $8.20 billion analysts had expected, based on LSEG data. AMD’s own release rounds the figure to $8.5 billion.
Su told analysts the demand is broad. “We see demand across the data-center business, across our CPU business, as well as our data-center AI business,” she said, according to Reuters. AMD expects growth to accelerate in the fourth quarter as Helios production scales.
PCs held up, gaming fell hard
The rest of AMD looked very different. Revenue in the Client and Gaming segment was $3.7 billion, down 8 percent from a year earlier. Inside that segment, the Client business, which sells processors for PCs, grew 7 percent to $2.9 billion on Ryzen mobile processor sales. Gaming revenue fell 40 percent to $773 million because of lower semi-custom and graphics revenue.
The smaller Embedded segment grew 29 percent to $1.1 billion, led by aerospace and defense, automotive, communications and industrial markets.
The $1.1 billion charge behind the profit
One line in AMD’s accounts explains much of the gap between its GAAP profit of $2.4 billion and its non-GAAP profit of $3.5 billion. AMD recorded a charge of $1.097 billion, or 66 cents a share, for the change in the value of warrants promised to two of its biggest customers. The charge is non-cash. No money left the company.
Reuters described the charge as $1.07 billion and tied it to warrant deals with OpenAI and Meta. In return for large chip purchase commitments, the customers received warrants, options to buy AMD shares later at a set price. OpenAI’s deal came last year. Meta’s followed in February and covers up to $60 billion worth of AI chips over five years. Each deal could let the customer own about 10 percent of AMD if conditions are met.
Accounting rules require AMD to revalue those warrants every quarter. When the share price rises, the warrants become more valuable, and the increase is booked as a charge. The deals also carry a cost. If the warrants are exercised, the share count grows and each existing share owns a smaller piece of the company. AMD finance chief Jean Hu said dilution would begin once OpenAI and Meta meet the vesting and exercise conditions, which include shipment and other commercial requirements. AMD expects to give more guidance on timing in 2027, according to Reuters.
A 2027 forecast that lifted the stock
The outlook drove the market reaction. AMD said it expects fourth quarter revenue of about $17 billion, plus or minus 3 percent. The midpoint would be up about 66 percent from a year earlier and about 27 percent from the third quarter. AMD expects non-GAAP gross margin of about 55 percent. These are company forecasts, not results.
Su went further on Tuesday’s analyst call. She said AMD expects overall revenue to grow by more than 80 percent in 2027, above the 77 percent growth analysts estimate, according to LSEG data reported by Reuters. Reuters reported that the stock has gained about 126 percent this year, and that AMD recently passed a market value of $1 trillion.
Analysis: what this quarter does and does not prove
Analysis. The clearest reading of this quarter is that AI spending is spreading. Reuters noted that AMD’s outlook signals AI spending extending beyond Nvidia’s accelerators, though Nvidia still dominates the market. Analysts at TD Cowen said AMD’s roadmap positions it to capture a meaningful share of the AI market. Morgan Stanley was more cautious about how long server growth can last.
The warrant deals show the price of that progress. AMD is trading a possible slice of future ownership for locked-in orders from two sought-after customers. Future quarters may carry more paper charges like this one, and shareholders face real dilution if the deals pay off. Nothing here changes the basic order of the AI chip market. Reuters reported that analysts see the warrants as a strong vote of confidence in AMD’s chips, but one unlikely to dent Nvidia’s dominance while Nvidia sells every AI chip it can make.
What to watch next
Three things will test this story. First, AMD has to deliver a fourth quarter close to $17 billion while it ramps up Helios and MI450 production. Second, AMD has promised more detail in 2027 on when the warrant conditions could be met and how large the dilution could be. Third, Nvidia reports its quarterly results on November 17, according to Nvidia. That report will show whether AMD’s demand reflects a rising market for every supplier, or the start of a real shift in share.
Sources: AMD Q3 2026 earnings release; Reuters; Nvidia newsroom.