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AMD expects to outsell Intel in Q4 for the first time in history
AI boom drives record quarterly revenue, but client and gaming business faces double-digit declines going into 2027
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AMD late on Tuesday reported its highest quarterly revenue ever as demand for its Epyc data center processors and Instinct AI accelerators nearly doubled year-over year and sales of its products for client systems were down only modestly despite high memory prices and other headwinds.
As increasing sales of data center hardware more than offset declines in the client realms, AMD's profitability continues to improve. Perhaps the most striking announcement AMD made is that it expects its Q4 revenue to reach approximately $17 billion, which would put it ahead of Intel for the first time in history.
AMD's third-quarter revenue reached $13.377 billion, a huge increase from $9.25 billion in the same quarter a year earlier and $11.54 billion in the previous quarter. The company's gross margin was 54% during the quarter, and net income increased by 95% to $2.43 billion. Diluted earnings per share reached $1.46, compared with $0.75 in the same quarter last year.
AMD's Data Center business was the main driver of its growth as the unit's sales reached a record $8.55 billion, up 97% from $4.34 billion a year earlier and 27% sequentially. The unit's operating income surged by 168% to $2.88 billion, while operating margin expanded from 25% to 34%.
The company attributed the results to strong demand for its latest Epyc processors and the launch of Instinct MI455X AI accelerators, which power its Helios rack-scale systems. Specifically, AMD noted that Anthropic, Meta, Microsoft, OpenAI, and Oracle Cloud Infrastructure are already running workloads on their first Helios systems.
AMD expects its Data Center revenue to increase from $8.55 billion in Q3 2026 to approximately $12.8 billion in Q4 (based on the company's guidance), driven by the ramp of Instinct MI455X accelerators and Helios systems. The company also projects that its server CPU revenue will double in 2027, while Data Center AI accelerator and rack revenue will more than double, which will push the DC unit's contribution to over 80% of total company sales, up from 64% this past quarter and from 47% in Q3 2025.
"We now expect server revenue to double year over year in 2027 and data center AI revenue to grow even faster than we projected ninety days ago," said Lisa Su, chief executive and chairman of AMD, during the company's earnings call with analysts and investors. "As a result, we expect data center to be more than eighty percent of our total revenue in 2027 and to drive the majority of our revenue and earnings growth."
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