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[News] AMD Defies AI Bubble Fears: Data Center AI Revenue to Top Server CPUs for First Time in 4Q, 2027 Sales Up 80%+

What happened

At its latest earnings call, AMD gave an upbeat outlook: according to Reuters, CEO Lisa Su expects the company's overall revenue to grow more than 80% in 2027, ahead of Wall Street's 77% forecast, with data center chips projected to generate 80% of total sales. Per CNBC, AMD's data center business posted a record third quarter, with revenue up 97% year over year to $8.55 billion, beating analysts' $8.20 billion estimate, while the segment's share of total revenue climbed to 64% from 47% a year earlier. Per Futu News, CFO Jean Hu expects data center AI revenue to overtake server CPU sales for the first time in the fourth quarter, signaling a significant shift in AMD's revenue mix; Su further projected server CPU revenue to double year over year in 2027 and data center AI sales to more than double. The third quarter marked the first revenue-generating shipments of MI455 accelerators and Helios racks, with a substantial ramp-up expected in the fourth quarter and further expansion throughout 2027; per Futu News, major technology companies including Meta, Microsoft, Anthropic, OpenAI, and Oracle have begun deploying Helios rack-scale systems in their data centers. AMD expects fourth-quarter revenue of approximately $17 billion, plus or minus 3%, beating Wall Street's $16.23 billion consensus (LSEG data cited by Reuters), with adjusted gross margin projected to edge down to 55% from 56% in the previous quarter, broadly in line with the 55.27% analyst forecast. Echoing Intel's warning that weak demand could persist through the first half of 2027, AMD anticipates a double-digit percentage decline in industry-wide PC shipments next year, though Su expects the company to outperform the market; AMD's third-quarter client and gaming revenue fell 8% year over year to $3.72 billion. Regarding soaring HBM prices, Su said the company has secured long-term agreements with some of its suppliers as well as some of its customers, and cautioned that inflationary pressures extend beyond memory, with other components also facing rising costs.