Advanced Micro Devices (AMD) reported a strong third quarter in 2026, with earnings and revenue surpassing Wall Street expectations. The company's revenue surged 45% year-over-year to $13.38 billion, driven by nearly doubling sales in its data center segment. AMD’s adjusted earnings per share came in at $2.09, outperforming the $1.95 expected. Following the report, AMD's stock rose 8% in after-hours trading, reflecting investor optimism amid robust demand, especially for artificial intelligence (AI) applications.

CEO Lisa Su highlighted the rapid growth in AMD’s data center business, which now accounts for 64% of the company’s total revenue, up from 47% a year ago. Su forecasted server revenue to double in 2027, with demand for AI chips accelerating beyond the company’s prior guidance. AMD has secured essential supply chain components to support this anticipated surge. The company’s resurgence in central processing units (CPUs) is significant, particularly with AI workloads that require long-running virtual machines, fueling increased interest from cloud providers and AI developers.

The report contrasts with Intel’s recent data center growth announcement, where despite a 78% revenue increase in that segment, Intel’s stock dropped sharply over concerns about guidance and supply chain challenges. AMD differentiates itself by offering a growing portfolio including data center GPUs and AI systems like Helios, which compete with Nvidia’s offerings. Major tech firms such as Meta, Microsoft, Anthropic, and Oracle are deploying AMD systems in their infrastructure, underscoring AMD’s expanding influence in the AI hardware market.

Despite this strong performance, AMD faces headwinds in its traditional PC and gaming markets, which saw revenue declines due to a global slowdown in PC shipments and softer demand. The combined PC and gaming segment revenue dropped 8% from the previous year. Nonetheless, AMD projects fourth-quarter revenue around $17 billion, beating analyst expectations. The company also made strategic moves like acquiring AI specialist World Labs for $8.2 billion and investing $1 billion in Meta, reinforcing its commitment to AI-driven growth beyond conventional chip markets.