AMD Earnings Call: Q4 Data Center AI Revenue to Surpass Server CPU Revenue for the First Time; Total Revenue Set to Grow Over 80% by 2027

AMD held a conference call following the release of its third-quarter (Q3) 2026 financial results. The company projects that its data center AI business revenue will exceed server CPU business revenue for the first time in Q4 2026, with total data center segment revenue expected to rise around 50% quarter-over-quarter. AMD forecasts total Q4 revenue of approximately $17 billion, up roughly 66% year-over-year. For Q3 2026, AMD’s revenue grew 45% YoY to $13.377 billion, a quarterly record, beating analyst estimates by about 2.3%. Non-GAAP earnings per share jumped 74% YoY to $2.09, exceeding expectations by over 6%. Gross margin stood at 56%, up 190 basis points YoY. Data center revenue surged 97% YoY to $8.5 billion, with its share of total revenue climbing from 47% in the year-ago period to 64%. AMD CEO Lisa Su expects total company revenue to grow over 80% YoY in 2027, with the data center segment accounting for more than 80% of total revenue, and server business revenue projected to double YoY. She noted current demand remains outstripping supply, and the company is collaborating with wafer, substrate, advanced packaging and storage suppliers to expand production capacity. AMD CFO John Hu forecasts 2027 operating expense growth will be less than half the revenue growth rate, leading to a significant improvement in operating margin. Su added that AI agents are emerging as the "next killer application" for cloud CPUs, driving demand for both accelerators and server CPUs. In contrast, the PC market faces pressure from rising memory and other component costs. Su stated AMD’s 2027 planning assumes a double-digit percentage decline in global PC shipments, and the company will focus on enterprise, high-end consumer and desktop channels.