AMD Stock Rises After Third-Quarter Profit Rises, As Data Center Revenue Soars 97%

AMD (AMD) reported its third-quarter results after the bell on Tuesday, beating top and bottom line expectations as the company’s data center revenue rose 97%.

AMD stock rose more than 7% following the news.

“Demand for our Instinct and EPYC products has continued to strengthen and we expect growth to accelerate further in the fourth quarter as we increase production of Helios and Venice,” CEO Lisa Su said in a statement.

“With our industry-leading product portfolio and strong relationships with our customers and supply chain, we are confident in our ability to maintain very strong revenue growth and increase profitability in the years to come. »

For the quarter, AMD reported earnings per share (EPS) of $2.09 on revenue of $13.38 billion. Analysts were forecasting EPS of $1.97 on revenue of $13.08 billion, according to Bloomberg consensus estimates.

The company reported EPS and revenue of $1.20 billion and $9.2 billion, respectively, during the same period last year.

AMD’s Data Center business generated revenue of $8.5 billion, ahead of estimates of $8.19 billion. It reported revenue of $4.34 billion during the same period last year.

Last month, the company announced its Helion Reference Design, a server rack designed to be equipped with various AMD CPU and GPU configurations according to customer needs.

Revenue from AMD’s Client business, which includes PC sales, reached $2.9 billion. Wall Street was looking for $3.06 billion.

Sales for the chipmaker’s gaming business, however, totaled $773 million, down 40% year-on-year. Analysts estimated revenue at $655 million.

The company’s gaming division includes products ranging from graphics cards for PCs to custom silicon for game consoles. Both categories face higher prices due to ongoing memory and storage shortages, depressing customer demand.

AMD’s report comes after rival Intel reported better-than-expected third-quarter results but issued guidance well below analyst projections last week. The news sent Intel stocks fall nearly 29%.

The company blamed the outlook on a deeper-than-expected decline in the PC market.

The industry faces two overlapping factors: tough comparisons with last year, when Microsoft ended support for Windows 10, forcing businesses to buy newer Windows 11 systems, and steadily rising PC prices, which are eating into demand.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on @DanielHowleyor contact Signal or Telegram.