AMD Posts Record $13.4 Billion Quarter as Data Center Sales Nearly Double and Gaming Revenue Sinks

AMD announced third-quarter results on Tuesday that set a company record, with revenue reaching $13.4 billion, a 45 percent increase from the same period a year earlier. The surge was powered by a data center business that nearly doubled, even as the company's gaming segment shrank sharply.

Looking ahead, the chipmaker projected an even bigger finish to the year. "We expect revenue to be approximately $17 billion, plus or minus 3%," said AMD CFO Jean Hu. "The middle point of our guidance represents approximately 66% year-over-year revenue growth, primarily driven by the acceleration of our Data Center segment." That outlook would represent a further 27 percent jump from the record quarter just reported.

The forecast sets up a potential milestone in the chip industry. Intel's own fourth-quarter guidance, as reported by Tom's Hardware, calls for revenue between $15 billion and $16 billion. If both companies hit their targets, AMD's quarterly revenue would surpass Intel's for the first time in history.

The data center segment was the clear engine of AMD's growth, bringing in a record $8.5 billion, up 97 percent year over year. The company credited demand for its EPYC line of enterprise server processors, together with the launch of its Instinct MI450 series GPUs.

Profitability in that segment improved alongside the revenue gains. Operating margins in AMD's data center business widened from 25 percent to 34 percent, while operating income climbed 168 percent to $2.88 billion.

AMD's Client business, which covers desktop and mobile processors, also grew, posting $2.95 billion in revenue, up 7 percent from a year earlier. The company said sales of its Ryzen mobile chips drove the increase.

The picture was far weaker in gaming, where revenue dropped 40 percent to $773 million. AMD attributed the decline to "lower semi-custom and graphics revenue."

The company's Embedded segment, which includes the SoCs, FPGAs, and boards AMD supplies for use in other hardware, generated $1.1 billion in revenue, up 29 percent. AMD pointed to gains in the "aerospace and defense, automotive, communications, and industrial end markets" as the source of that growth.