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Advanced Micro Devices (AMD) is seeing a muted reaction after delivering strong Q3 results last night, even as the company reported record revenue, beat expectations on both the top and bottom line, and guided Q4 above expectations. After posting in-line EPS last quarter, AMD returned to modest upside, while revenue surged 35.6% yr/yr to a record $9.2 bln. Its Q4 guidance of $9.3-9.9 bln also points to further acceleration.

• Record results were fueled by broad-based strength across data center AI, server, and PC markets.
• Data center revenue accelerated 22% yr/yr (34% q/q) to $4.3 bln, fueled by a sharp MI350 GPU ramp and record server CPU sales, with 5th Gen EPYC "Turin" accounting for about half of total EPYC revenue.
• AMD said its Data Center AI business is entering a new growth phase as momentum builds ahead of MI400 accelerators and Helios rack-scale systems in 2026, positioning it on track for "tens of billions" in annual revenue by 2027.
• Client and Gaming also hit a record $4.0 bln, up 73% yr/yr (12% q/q), supported by strong Ryzen CPU and Radeon GPU demand. Client rose 46% yr/yr to $2.8 bln, while Gaming jumped 181% to $1.3 bln.
• AMD said it will deepen its partnership with OpenAI on next-generation hardware, software, and system development, a move aimed at accelerating its Data Center AI growth, with potential to generate over $100 bln in revenue over the next few years. Oracle will also be a lead launch partner for the MI450 series, deploying tens of thousands of GPUs on OCI starting in 2026.
• Q4 guidance calls for continued Data Center and CPU growth, partially offset by seasonal Gaming declines. Gross margin is expected near 54.5%, up slightly from Q3, and excludes any MI308 sales to China, though AMD noted it has received some export licenses and is evaluating demand.

Briefing.com Analyst Insight

AMD's report had plenty to like, with record revenue, upbeat guidance, and tangible AI traction, yet shares initially dipped as investors weighed valuation amid stretched AI sentiment. The stock has already doubled this year, and much of the heavy AI revenue lift is still a few quarters out as MI450 and Helios systems come online in 2026. That said, the fundamentals and setup look attractive, supported by strong EPYC CPU demand, including next-gen traction, as hyperscalers expand compute capacity, growing visibility from major customer wins, and a strengthening full-stack platform that positions AMD well for the next wave of data center growth.