AMD posts record $13.4B quarter as AI demand dents gaming

AMD booked $13.4 billion in third-quarter revenue, up 97% year over year — the largest and most profitable quarter in the company's history, CEO Lisa Su said on Tuesday's earnings call. The same AI demand that drove the record is squeezing AMD's consumer business: gaming revenue fell 40% to $773 million.

The data center segment, which includes Instinct accelerators and Epyc server processors, generated $8.5 billion — about 63% of net revenue. AMD expects another record next quarter at roughly $17 billion.

How fast is AMD becoming an AI infrastructure company?

The sequential numbers show the tilt. Total revenue rose $1.9 billion from the second quarter, and $1.8 billion of that came from data center. For the past two years, AMD's overall growth has tracked its server and accelerator sales almost one-for-one.

CFO Jean Hu put a number on where this ends. "Looking ahead of 2027, we actually think our data center business will be more than 80% of total company revenue," she said.

Su said AMD expects revenue to "grow more than 80% in 2027," adding that "data center will be the largest contributor."

What happened to gaming and client chips?

The combined Client and Gaming segment brought in $3.7 billion, down 8% from a year earlier. The split inside it diverged sharply:

• Client (Ryzen processors): $2.9 billion, up 7%. Growth came mainly from Ryzen mobile processors in laptops and mini PCs.
• Gaming: $773 million, down 40%, on lower semi-custom and graphics revenue.

Desktop processors and graphics cards, hit by higher memory and component costs, did not contribute to the client gain. Semi-custom revenue covers the chips AMD designs for Sony's PlayStation 5 and Microsoft's Xbox Series X|S, plus mobile systems-on-chip in handhelds such as Valve's Steam Deck, the Asus ROG Xbox Ally X and the Lenovo Legion Go 2. The graphics side includes desktop Radeon RX 9000 series GPUs. Prices for all of these products have risen sharply over the past year.

Su said the increases have slowed sales. "Our view is, this is one of those times — when, you know, component prices go up, it affects overall system pricing," she said. "One would expect the consumer markets to be more sensitive to that, and so we have seen a bit of a slowdown in the sell-through."

How long will the memory shortage last?

AI data centers are buying up memory and other components, pushing up prices for the PCs and consoles that use AMD chips. AMD does not expect relief soon. The company is planning for the 2027 PC market to "decline by a double-digit percentage."

"We are planning with the current environment for a down year for 2027," Su said.

Other chipmakers share that view. Intel has said it does not expect the memory shortage to improve next year. SK Hynix expects it to last until 2030.

Can AMD outgrow a shrinking PC market?

AMD still expects to beat the shrinking market. The company is counting on its Ryzen roadmap — which appears to include consumer Zen 6 processors due next year — and a larger presence among commercial PC buyers.

One part of the graphics business is already moving against the trend. The Radeon AI PRO Series, aimed at workstations and AI workloads, is growing strongly and outperforming the rest of the GPU lineup; AMD expects that to continue.

If Hu's forecast holds, AMD's results will soon depend almost entirely on server and accelerator sales. The company's consumer business, once its public face, is becoming the smaller half of the story.