AMD Q3 2026 Revenue Rises 45% on Data Center Growth

Advanced Micro Devices Inc. (AMD) reported record third-quarter 2026 revenue and non-GAAP earnings as Data Center sales nearly doubled, more than offsetting a decline in Client and Gaming. The chipmaker also projected about $17 billion of fourth-quarter revenue, plus or minus 3%, as it expands its AI accelerator, server processor and rack-scale computing portfolio.

Revenue for the quarter ended in 2026 rose 45% year over year and 16% sequentially to $13.38 billion. Data Center revenue increased 97% to a record $8.55 billion, driven by strong demand for AMD EPYC processors and the launch of AMD Instinct MI450 Series GPUs.

GAAP gross margin widened to 54% from 52% a year earlier, while non-GAAP gross margin reached 56%, compared with 54%. AMD attributed the non-GAAP improvement to a richer product mix.

GAAP operating income more than doubled to $2.83 billion from $1.27 billion, lifting operating margin to 21% from 14%. Net income increased 95% to $2.43 billion, and diluted earnings per share rose to $1.46 from $0.75.

On a non-GAAP basis, operating income climbed 75% to a record $3.92 billion, with operating margin expanding to 29% from 24%. Non-GAAP net income rose 77% to $3.47 billion, while diluted EPS increased 74% to a record $2.09. AMD’s non-GAAP results exclude items including stock-based compensation, acquisition-related intangible amortization and a $1.10 billion change in the fair value of warrants issued to certain customers.

Data Center drives growth

Data Center operating income increased 168% to $2.88 billion, and segment operating margin rose to 34% from 25%. Higher revenue drove the improvement, partly offset by increased operating expenses.

AMD said Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running models and workloads on its first Helios rack-scale systems. The company also introduced the Helion reference architecture for rack-scale agentic systems and released ROCm 10, including AI-focused developer capabilities through ROCm.AI.

The company announced proposed acquisitions of World Labs and Taalas to broaden its capabilities across the AI technology stack. Both transactions are expected to close by the end of 2026, subject to regulatory approvals and customary conditions.

Client and Gaming declines, Embedded expands

Client and Gaming revenue fell 8% to $3.72 billion as lower semi-custom and graphics sales outweighed higher Client revenue. Client sales were approximately $2.9 billion, up from $2.8 billion, while Gaming revenue declined to about $800 million from $1.3 billion.

Segment operating income dropped 34% to $573 million, and operating margin narrowed to 15% from 21%, reflecting lower gross profit and reduced operating leverage.

Embedded revenue increased 29% to $1.11 billion, supported by growth in aerospace and defense, automotive, communications and industrial markets. Operating income rose 60% to $453 million, with operating margin expanding to 41% from 33% on higher revenue leverage.

Fourth-quarter outlook

For the fourth quarter of 2026, AMD expects revenue of approximately $17 billion, plus or minus 3%. The company projects a non-GAAP gross margin of about 55% and non-GAAP operating expenses of roughly $3.75 billion.

AMD also forecasts other income net of interest expense of about $4 million, a 13% non-GAAP effective tax rate and approximately 1.67 billion diluted shares. The share-count estimate includes potential shares associated with the proposed World Labs and Taalas acquisitions.

AMD ended the third quarter with $15.78 billion of cash, cash equivalents and short-term investments, up 20% from the prior quarter. Total debt increased to $7.08 billion from $3.23 billion following a $4.75 billion senior notes offering completed in August. Inventories rose 35% sequentially to $11.46 billion, while net accounts receivable increased 26% to $9.21 billion.

The outlook remains subject to risks including export controls, tariffs and licensing requirements; competition and semiconductor industry cyclicality; product launch execution; customer concentration; memory and other component availability; reliance on third-party manufacturing and software support; acquisition integration; and fluctuations in the fair value of customer warrants, which can affect GAAP earnings.