Advanced Micro Devices is forecasting a sharp acceleration in data center sales for the fourth quarter, with Chief Executive Officer Lisa Su saying AI GPU revenue is expected to exceed server CPU revenue for the first time as the company ramps MI450-series accelerators and Helios rack-scale systems.
AMD reported fiscal 2026 third-quarter revenue of $13.377 billion, up 45% from a year earlier and 16% from the prior quarter, according to the company's earnings release. Adjusted earnings per share reached $2.09, a 74% year-on-year increase. The results exceeded the $13.06 billion revenue and $1.94 adjusted EPS estimates cited in the supplied market data.
The company projected fourth-quarter revenue of about $17 billion, plus or minus 3%, implying a range of roughly $16.49 billion to $17.51 billion. At the midpoint, the forecast would represent approximately 66% annual growth and 27% sequential growth. AMD said data center revenue should rise about 50% from the third quarter.
That outlook places AMD's AI accelerator business at the center of its near-term expansion. The company expects AI GPUs to become larger than its server CPU operation during the fourth quarter, a major change for a business historically associated with EPYC server processors as well as PC and gaming chips.
Data center sales approach two-thirds of amd revenue
AMD's data center segment generated $8.546 billion during the third quarter, up 97% from the same period a year ago and 27% from the previous quarter. The segment accounted for nearly 64% of total company revenue, based on AMD's reported figures.
Operating profit in the data center unit climbed 168% year-on-year to $2.882 billion. Its operating margin expanded to about 33.7%, compared with roughly 24.7% a year earlier, showing that the revenue increase was accompanied by stronger profitability rather than solely higher hardware volumes.
AMD attributed the gains to sales of EPYC CPUs and Instinct AI GPUs, alongside early volume shipments of its MI450-series GPUs and Helios systems. Helios is AMD's rack-scale AI infrastructure platform, designed to combine accelerators, processors, networking and system components for large-scale model training and inference workloads.
The company said Helios systems have been used for models or workloads by Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure. Those deployments place AMD in direct competition for AI infrastructure spending that has largely concentrated around large cloud operators and model developers.
AMD also forecast total revenue growth of more than 80% in 2027, with the data center unit contributing more than 80% of company revenue. Such a mix would make the company far more dependent on enterprise AI infrastructure orders than on its traditional client computing and gaming businesses.
Consumer and gaming units tell a different story
AMD's client and gaming segment produced $3.722 billion in third-quarter revenue, down 8% from a year earlier and 3% from the previous quarter. Results within the segment were uneven.
Client revenue, which includes PC processors, rose 7% year-on-year to $2.949 billion. Gaming revenue fell 40% to $773 million. AMD reported client and gaming operating profit of $573 million, down 34% from the previous year.
The numbers point to a business increasingly led by data center demand, though they do not establish that AMD is withdrawing from consumer graphics products or reducing retail GPU output. Gaming sales can be affected by console-chip cycles, product timing and demand patterns that differ from the market for desktop graphics cards.
For cryptocurrency miners, decentralized-computing operators and small AI infrastructure firms, AMD's results offer a more specific signal: large-scale buyers are becoming increasingly central to the company's revenue and product ramp. That could tighten competition for high-performance accelerators used in compute-heavy workloads, especially where buyers seek equipment suited to AI training or inference.
It does not automatically translate into a shortage of every consumer GPU or server component. AMD has not said that it will stop serving retail customers, and the company's reported segment data does not provide a product-by-product allocation plan. Yet the projected rise in AI GPU sales shows where AMD expects its highest-value deployments to emerge.
Inventory build supports the fourth-quarter ramp
AMD increased inventory by about $2.995 billion during the quarter, bringing total inventory to $11.463 billion, up 35% sequentially. The company said it was building stock ahead of anticipated higher volumes.
Accounts receivable rose by approximately $1.928 billion, while accounts payable increased by about $2.313 billion. These working-capital movements reflect the scale of the expected production and shipment ramp, though they also weighed on cash generation during the period.
Operating cash flow totaled $1.202 billion. Capital expenditures were $648 million, leaving free cash flow of $554 million, down from $1.530 billion a year earlier. AMD's free-cash-flow margin was about 4% for the quarter.
The company ended the period with $15.776 billion in cash, cash equivalents and short-term investments, against $7.079 billion in total debt. That debt included $4.75 billion in senior notes financing completed in August, according to AMD.
Profit measures diverge after warrant expense
AMD reported GAAP operating profit of $2.832 billion, up 123% year-on-year. Adjusted operating profit reached $3.923 billion, up 75%, while adjusted operating margin rose to 29% from 24% a year earlier.
The gap between reported and adjusted results included roughly $1.097 billion in non-cash expense linked to fair-value changes in customer warrants. Such warrant-related charges can move with changes in the value of the underlying commercial arrangements and do not necessarily reflect cash operating costs in the quarter.
AMD's embedded segment added another source of growth, reporting revenue of $1.109 billion, up 29% year-on-year and 14% sequentially. Operating profit reached $453 million, up 60%, while operating margin was about 40.8%.
The fourth-quarter forecast now puts the focus on whether AMD can convert its inventory build and early MI450 shipments into the projected surge in data center sales. A 50% sequential increase in that segment would further shift AMD's revenue base toward AI systems sold into hyperscale and enterprise computing environments.
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