AMD Q3 Earnings Beat Estimates but Stock Dips on Margin Guidance

Advanced Micro Devices Inc. reported third-quarter revenue of $9.25 billion, surpassing analysts' $8.74 billion estimate, with adjusted earnings per share of $1.20 beating the $1.16 consensus. Despite 36% year-over-year revenue growth and net income rising to $1.24 billion from $771 million, shares fell in extended trading as gross-margin guidance of 54.5% merely met expectations.

The chipmaker projected Q4 revenue of approximately $9.6 billion, exceeding the $9.15 billion Street forecast, while maintaining its exclusion of potential China-bound MI308 chip revenue from guidance. AMD shares had rallied 107% year-to-date prior to the report, significantly outpacing the Nasdaq's 21% gain.

In a strategic move, AMD secured a partnership with OpenAI that could see the AI research organization acquire up to 10% of AMD. The agreement includes plans to deploy 6 gigawatts of AMD Instinct GPUs across multiple generations, signaling growing demand for AI-optimized hardware.