Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD)'s third quarter revenue and earnings topped Wall Street estimates driven by strong demand for its AI data center chips, but shares moved lower as the company’s sales guidance disappointed.
The company posted record revenue of $6.82 billion for Q3, up 18% year-over-year and ahead of estimates of $6.71 billion.
Data Center segment revenue was a record $3.5 billion, up 122% from the same period in 2023 attributed to the ramp of AMD Instinct GPU shipments and growth in AMD EPYC CPU sales.
Gaming revenue, however, was down 69% year-over-year at $462 million which AMD said was due to a decrease in semi-custom revenue.
Earnings per share (EPS) of $0.92 were ahead of the consensus $0.91. This marked a 31% increase from the year-ago quarter.
“We delivered strong third quarter financial results with record revenue led by higher sales of EPYC and Instinct data center products and robust demand for our Ryzen PC processors,” AMD CEO Lisa Su commented.
“Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute.”
For Q4, AMD guided revenue in the range of $7.2 billion to $7.8 billion, at the midpoint marking 22% growth from the year-ago quarter.
However, the lower end of this guidance range disappointed investors, falling short of the Street consensus of $7.54 billion.
This sent AMD shares 6% lower to about $156 post-earnings.