AMD Powers Ahead in the AI Race with Record-Breaking Quarter
In a year defined by the artificial intelligence boom, Advanced Micro Devices (AMD) continues to prove it’s more than just a challenger in the semiconductor industry — it’s a contender.
The chipmaker reported better-than-expected third-quarter results on Tuesday, posting record revenue and profitability, driven by surging demand for its EPYC processors, Ryzen chips, and Instinct AI accelerators. AMD also provided a strong Q4 forecast, reinforcing optimism that the company’s multibillion-dollar AI and data center expansion is paying off.
“We delivered an outstanding quarter, with record revenue and profitability reflecting broad-based demand for our high-performance EPYC and Ryzen processors and Instinct AI accelerators,” AMD CEO Lisa Su said.
“Our record third quarter performance and strong fourth quarter guidance marks a clear step up in our growth trajectory as our expanding compute franchise and rapidly scaling data center AI business drive significant revenue and earnings growth.”
Despite initially rising after the announcement, AMD’s stock dipped 3.5% in after-hours trading, a sign that investors may have already priced in much of the company’s recent rally. Still, the long-term outlook remains overwhelmingly positive.
AMD’s Q3 2025 Earnings: Breaking Down the Numbers
For the quarter ended September 2025, AMD reported earnings per share (EPS) of $1.20 on revenue of $9.25 billion, surpassing analyst expectations of $1.17 EPS and $8.74 billion in revenue, according to Bloomberg consensus estimates.
Segment Highlights:
- Data Center: $4.3 billion (vs. $4.1 billion expected)
- Client Computing: $2.9 billion (vs. $2.6 billion expected)
- Gaming: $1.3 billion (vs. $1.1 billion expected)
- Embedded: $750 million (in line with forecasts)
The company’s data center division — which includes EPYC server CPUs and Instinct AI accelerators — remains the growth engine, surging 23% year-over-year as cloud providers, government labs, and AI developers continue to build next-generation computing infrastructure.
Su emphasized that AMD’s strong performance was “a reflection of how the world is rapidly shifting toward compute-intensive workloads,” from AI model training to sovereign cloud computing and edge AI applications.
AI Partnerships Drive Explosive Growth and Investor Confidence
A large part of AMD’s recent momentum stems from its strategic partnerships with major technology firms that are building global AI infrastructure.
1. The OpenAI Deal
In September, AMD announced a landmark agreement with OpenAI valued at up to 6 gigawatts of AI compute capacity. Under the deal, AMD will supply Instinct MI450 GPUs to power OpenAI’s next wave of data centers — including those supporting ChatGPT and future generative AI systems.
In return, OpenAI agreed to purchase approximately 160 million shares of AMD, representing about 10% of the company’s equity stake — a move widely viewed as a vote of confidence in AMD’s technology leadership.
2. The Oracle Partnership
Around the same time, AMD finalized a separate agreement with Oracle (ORCL) to deploy 50,000 AI GPUs across the cloud provider’s global data centers. The collaboration will expand Oracle’s AI infrastructure and enable enterprises to train and deploy foundation models at scale.
These two deals collectively represent billions in future revenue opportunities — and more importantly, they solidify AMD’s position as the strongest alternative to Nvidia in the AI chip market.
AMD’s Expanding Role in AI and Supercomputing
Beyond commercial partnerships, AMD is also playing a pivotal role in powering public-sector AI initiatives.
The company recently confirmed that its chips are being used in two next-generation U.S. Department of Energy supercomputers at Oak Ridge National Laboratory, a project representing over $1 billion in public and private investment.
These systems will rely on AMD’s Instinct accelerators and EPYC processors to tackle complex scientific research, climate modeling, and defense simulations. Su described these projects as “a testament to AMD’s leadership in high-performance computing and AI convergence.”
A Record-Setting Stock Performance — and Room to Run
AMD’s market performance has been nothing short of spectacular. Shares are up 108% year-to-date and 79% over the past 12 months, driven by optimism about its expanding AI portfolio and the growing global demand for semiconductors.
The company’s stock has rallied 53% in just the past month, reflecting investor enthusiasm following a series of announcements about new partnerships, chip launches, and government contracts.
Still, AMD’s $418 billion market capitalization trails industry heavyweight Nvidia (NVDA), which recently surpassed the $5 trillion milestone. However, analysts believe that AMD’s undervalued position and aggressive AI roadmap could help close that gap in the coming years.
Q4 Guidance: Strong Momentum Into 2026
Looking ahead, AMD issued bullish guidance for the fourth quarter, projecting revenue between $9.3 billion and $9.9 billion, ahead of Wall Street’s consensus estimate of $9.21 billion.
The company expects double-digit sequential growth in both its data center and client segments, with AI infrastructure demand expected to remain the biggest catalyst through 2026.
“Our fourth-quarter guidance highlights the strength of our diversified compute franchise,” Su said. “We expect to enter 2026 with record backlog and accelerating AI revenue growth.”
AMD’s fourth-quarter momentum will likely be driven by early production runs of its MI450 GPUs and rack-scale computing platforms, which are set to begin shipping to major partners — including OpenAI, Oracle, and the Department of Energy — in the second half of 2026.
Analyst Outlook: “A Clear Step-Up in Growth Trajectory”
Industry analysts broadly praised AMD’s results and outlook, with several reiterating “Buy” or “Strong Buy” ratings following the earnings call.
Joseph Moore of Morgan Stanley noted that AMD’s upcoming rack-scale AI solutions are a “game changer,” allowing the company to deliver modular supercomputing systems at a fraction of the cost of competitors.
“AMD’s rack-scale solution shipping next year is the key,” Moore wrote. “The OpenAI agreement is clearly an accelerant, though cloud ramp-up timing remains a variable. Ultimately, AMD’s ability to offer better ROI than Nvidia will determine how much share it can capture.”
Meanwhile, Bernstein’s Stacy Rasgon pointed out that AMD’s strength lies in balance — diversifying across multiple revenue streams instead of depending solely on AI.
“The company’s growth is being driven by AI, but its consumer and gaming segments remain robust,” Rasgon said. “That makes AMD less vulnerable to cyclical swings compared to Nvidia.”
Beyond the Numbers: The Strategic Shift Behind AMD’s Success
AMD’s resurgence is not just about chips — it’s about strategy. Over the past two years, the company has aggressively positioned itself in three high-growth verticals:
- AI Infrastructure: Through Instinct GPUs and partnerships with OpenAI and Oracle.
- High-Performance Computing (HPC): Powering government supercomputers and research facilities.
- Consumer Compute: Expanding Ryzen and Radeon adoption across gaming and PC markets.
This balanced approach ensures that AMD’s success doesn’t hinge on a single product cycle — a crucial advantage as the semiconductor industry braces for potential supply constraints in 2026.
AMD’s AI-Fueled Future Is Just Getting Started
With record-breaking revenue, expanding partnerships, and a bold forecast for 2026, AMD’s Q3 earnings underscore a defining moment in the company’s evolution.
Once seen as a distant second to Nvidia, AMD is now closing the gap in AI compute while maintaining leadership across traditional chip markets. Its strong Q4 guidance, combined with transformative deals in AI infrastructure, points to sustained growth and market share gains in the years ahead.
“We’re entering a new era of accelerated computing,” Lisa Su concluded. “AMD is uniquely positioned to deliver the performance, efficiency, and scalability the world’s AI future demands.”
As AI becomes the backbone of the global economy, one thing is clear: AMD is no longer chasing the future — it’s helping to build it.