Advanced Micro Devices (AMD) has forecast fourth-quarter revenue above market expectations, driven by strong demand for its artificial intelligence chips and expanding data centre infrastructure investments.
The company expects revenue of about 9.6 billion dollars for the quarter, plus or minus 300 million dollars, compared with analysts’ average estimate of 9.15 billion dollars. Despite the positive outlook, AMD shares fell about 3% in extended trading, as short-term investors appeared to take profits after a strong year.
AMD’s stock has more than doubled in 2025, outperforming larger rival Nvidia, even as Nvidia’s market valuation crossed 5 trillion dollars. Analysts say investors remain cautious about whether AI-related investments can sustain their high valuations over time.
In the third quarter, AMD reported sales of 9.25 billion dollars, surpassing analyst estimates of 8.74 billion dollars. Revenue in its data centre segment, which includes AI chips, rose 22% to 4.3 billion dollars, exceeding projections of 4.09 billion dollars.
Executives said during a conference call that AMD has received licences to sell modified versions of its MI300 AI chips in China, though sales have not yet started. Nvidia has also received similar licences for its AI products in China.
Major technology firms continue to invest heavily in AI hardware. AMD customer Microsoft recently reported nearly 35 billion dollars in capital expenditure for its fiscal first quarter, with about half spent on chips. The expansion of data centre operations has also boosted demand for server central processing units, an area where AMD is steadily gaining market share against Intel.
Sales in AMD’s client computing segment, which serves the personal computer market, rose 46% to 2.8 billion dollars in the third quarter, supported by growing demand for AI-enabled PCs and an ongoing Windows upgrade cycle. Preliminary research data showed an 8% rise in global PC shipments during the quarter.
AMD expects an adjusted gross margin of 54% in the fourth quarter, in line with the third quarter and slightly below the 54.5% market estimate. Adjusted earnings stood at 1.20 dollars per share, beating expectations of 1.16 dollars.
Last month, AMD announced a multi-year deal to supply AI chips to OpenAI, a partnership expected to generate tens of billions of dollars in annual revenue. The agreement includes the deployment of hundreds of thousands of AMD GPUs, underscoring its growing role in the global AI chip race, even as Nvidia continues to lead the industry.
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