AMD Expects Data Center to Exceed 80% of 2027 Revenue

Lisa Su's 80% Data Center Forecast

Advanced Micro Devices (AMD) expects its data center segment to account for more than 80% of total revenue in 2027, CEO Lisa Su said on the company's third-quarter earnings call held on Tuesday. The unit, Su added, should drive the majority of both revenue and profit growth as the company scales its AI hardware business. The quarterly numbers behind that projection already show the shift underway. In the fiscal third quarter, which ended September 26, data center revenue reached $8.546 billion, or 63.9% of AMD's $13.377 billion total. A year earlier the segment contributed roughly 47% of sales; by the second quarter of 2026 the share had climbed to about 58%, a gain of roughly 17 percentage points in a single year. Data center revenue rose 97% year over year and 27% from the prior quarter, and AMD credited demand for its EPYC server CPUs along with the launch of the Instinct MI450 series. The segment is broader than AI accelerators: AMD's annual report places server CPUs and GPUs, AI accelerators, data processing units, network interface cards, FPGAs and adaptive systems-on-chip within it. Two further projections came from the same call. Su expects total company revenue to grow more than 80% in 2027, a separate figure from the segment's revenue share, with server revenue roughly doubling and data center AI revenue expanding even faster. She also expects data center AI sales to overtake server CPU revenue for the first time in the fourth quarter. AMD declined to give quarterly gross margin targets for 2027, citing the changing composition of the data center AI and server businesses. Supply dominated the question-and-answer session. When a Barclays analyst asked whether wafers, packaging, substrates and memory could support the 2027 outlook, Su replied that demand currently exceeds supply, and AMD is coordinating production increases with suppliers against customers' data center build schedules.

Shares Jump on a $17 Billion Outlook

AMD shares jumped as much as 8% in after-hours trading on Tuesday as the results beat expectations on both lines. Revenue came in at $13.38 billion, up 45% from $9.25 billion a year earlier and ahead of the $13.09 billion expected by analysts surveyed by LSEG, while earnings per share of $2.09 topped the $1.95 estimate. The company detailed the figures in its third-quarter 2026 report, and for the fourth quarter it guided to roughly $17 billion in revenue, above the $16.2 billion consensus. The expected gross margin of about 55% sat just below the 55.3% StreetAccount estimate, so the sales outlook carried the surprise. “We have worked across our supply chain to secure the wafers, substrates, advanced packaging, memory, and other key components needed to support much higher growth next year,” Su said on the call. The rally followed three straight down sessions in which investors questioned whether the industry was spending too heavily on AI infrastructure; even so, the stock is up roughly 125% this year. Not every line grew: client and gaming revenue fell 8% to $3.7 billion, with gaming sales down 40%, and Su said AMD built its plans assuming global PC shipments decline at a double-digit rate in 2027. NVIDIA (NVDA) still leads the market for AI graphics processors, but AMD is winning server CPU customers as agentic AI workloads spread; these are software agents that run tasks independently for hours, and Meta's Muse is one example. AMD's Helios racks, which integrate AI chips into complete server systems, compete with NVIDIA's Grace Blackwell and Vera Rubin architectures, and their users include Meta, Microsoft, Anthropic, OpenAI and Oracle. Meta has already brought Helios racks online, and AMD committed up to $1 billion to a Meta equity deal alongside a $5 billion investment in Anthropic. In September, AMD also announced an $8.2 billion all-stock agreement to acquire World Labs, the spatial-intelligence company founded by researcher Fei-Fei Li.

The stock last traded at $505.71, up 5.84% over 24 hours, according to COINOTAG data, within a range of $468.73 to $536.40. The session high ran through the nearest resistance level at $529.10, which COINOTAG's composite scoring rates 100 out of 100, before the price settled back near the strongest support at $503.68, scored 95/100. The daily RSI reads 42.5 and the trend classification on the daily chart remains a downtrend, so the post-earnings bounce has not yet redrawn the map. Open interest on the AMD stock perpetual stands at $29.87 million. Holding above $503.68 keeps the composite's strongest support intact.