Advanced Micro Devices, Inc. Shs -CAD hedged- Canadian Depositary Receipt Repr Shs Reg S (AMD) Q3 2026 Earnings Report

The call was strongly positive. AMD reported record revenue, earnings, data center performance and operating leverage, raised its 2027 growth outlook, and described broad customer momentum across EPYC, Instinct, Helios and embedded products. The main challenges were weaker client and gaming trends, a planned double-digit PC market decline in 2027, demand exceeding supply, elevated inventory and capacity investment, component cost inflation, and a significant noncash warrant-related GAAP charge. The positive operating and growth trends significantly outweighed the stated challenges.

For the fourth quarter of fiscal 2026, AMD expects revenue to be approximately $17 billion, plus or minus 3%, representing approximately 66% year-over-year revenue growth and approximately 27% sequential growth, including data center growth of approximately 50%, a client and gaming segment decline of greater than 20% and double-digit growth in Embedded; non-GAAP gross margin is expected to be approximately 55%, non-GAAP operating expenses approximately $3.75 billion, non-GAAP net interest and other expense a gain of approximately $4 million, the non-GAAP effective tax rate 13% and diluted share count approximately 1.67 billion shares, including the estimated impact of closing the Taalas and the World Labs acquisitions in the fourth quarter. AMD expects data center segment revenue growth to accelerate in the fourth quarter and full-year segment revenue to more than double from 2025; for 2027, it expects revenue to grow more than 80%, server revenue to double year-over-year, data center AI revenue to grow even faster than we projected 90 days ago, data center to be more than 80% of total revenue, PC market unit shipments to decline by a double-digit percentage, and OpEx to grow less than half of the top line revenue growth rate.