---
title: "AMD Q3 Earnings Call: Lisa Su Addresses Supply Constraints, Forecasts Over 80% Revenue Growth in 2027"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/304192523.md"
description: "AMD reported its fiscal 2026 Q3 results, with revenue reaching $13.377 billion, a 45% year-over-year increase, setting a new historical record. CEO Lisa Su raised the 2027 revenue growth forecast to over 80%, with the data center segment accounting for more than 80% of total revenue. Addressing supply constraints, Su stated that the company is collaborating with its supply chain to expand the supply of key components and expressed strong confidence in future growth. Shares rose over 9% in after-hours trading"
datetime: "2026-11-04T03:17:02.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/304192523.md)
  - [en](https://longbridge.com/en/news/304192523.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/304192523.md)
generator: "portal-rs"
---

# AMD Q3 Earnings Call: Lisa Su Addresses Supply Constraints, Forecasts Over 80% Revenue Growth in 2027

Zhitong Finance APP learned that AMD (AMD.US) held its fiscal 2026 third-quarter earnings conference call after the U.S. market close on November 3 (Eastern Time). Revenue for the quarter was $13.377 billion, a 45% year-over-year increase, setting a new single-quarter historical high and exceeding market expectations of approximately $13.09 billion. Non-GAAP diluted earnings per share (EPS) were $2.09, a 74% year-over-year increase, beating expectations of approximately $1.94. GAAP diluted EPS was $1.46, which included an $1.1 billion non-cash fair value reassessment of warrants. Data center revenue was $8.546 billion, up 97% year-over-year, accounting for 64% of total revenue, compared to 47% in the same period last year. In terms of stock performance, shares closed up 3.65% at $483.90 during regular trading hours; after the earnings release, shares rose more than 9% in after-hours trading.

The most significant information from this conference call was the company's substantial upward revision of its 2027 outlook. CEO Lisa Su stated during the call that, based on current visibility, revenue in 2027 is expected to grow by more than 80%, which is more than double the growth rate provided in the long-term financial model at last November's Analyst Day. Server revenue is expected to roughly double, data center AI business growth will significantly exceed doubling, and the data center segment's share of total revenue will exceed 80%. Supply was the most frequently asked topic by analysts, with institutions such as Barclays and Morgan Stanley questioning whether the supply of wafers, advanced packaging, and memory could support such growth rates. Su responded that demand indeed exceeds supply currently. The company has engaged in multi-year joint planning with customers and the supply chain and is collaborating to expand the supply of key components such as wafers, substrates, advanced packaging, and memory. She expressed being "very confident" in data center growth in 2027. Emarketer analyst Jacob Bourne believes that against the backdrop of investors increasingly scrutinizing AI spending and its returns, these results will encourage investors.

Key points from the conference call include:

**Data Center and AI Business: Acceleration and Crossover.** Su stated that data center revenue growth accelerated sequentially every quarter this year. EPYC Turin has become the most widely deployed EPYC generation, with over 540 public cloud instance types. Agentic workloads have become an important driver of CPU demand. The new generation of EPYC Venice processors has begun shipping, with OEM/ODM commitments for over 240 platforms. MI455X has begun mass shipments, and the first Helios racks for Anthropic, Meta, Microsoft, OpenAI, and Oracle are online. CFO David Hu (Hu Jin) expects data center AI revenue to surpass server CPU business revenue for the first time in the fourth quarter.

**2027 Outlook: Triple Upward Revision.** In addition to revenue growth exceeding 80%, Su provided three benchmarks: server revenue to roughly double; data center AI growth to "significantly exceed doubling"; and the data center segment to account for more than 80% of total revenue. External commentators such as Huatai Securities and Wallstreetcn interpreted this as AMD's expression of confidence in AI computing power demand.

**Client and Gaming: Warning of Pressure in the PC Market.** Client and gaming business combined revenue was $3.7 billion, down 8% year-over-year, with the gaming business declining 40% year-over-year. Su explicitly warned that PC market shipments are expected to see a double-digit percentage decline in 2027, mainly due to component price increases pushing up whole-machine prices and consumer market sensitivity to prices. AMD will focus on high-value segments such as enterprise, high-end consumer, and desktop channels, and will flexibly allocate supply leveraging the interchangeability of PC and data center supply chains.

**Supply and Costs: Demand Exceeds Supply.** Management confirmed in multiple Q&A sessions that demand exceeds supply and is working with the supply chain to expand the supply of wafers, substrates, advanced packaging, memory, etc. Regarding price increases for components such as HBM, Hu stated that the company has signed long-term agreements with some suppliers and customers and is negotiating with customers to share the rising costs.

**Q4 Guidance: Sequential Increase of Approximately 27%.** The company expects Q4 revenue of approximately $17 billion (±3%), with a median year-over-year increase of 66% and a sequential increase of approximately 27%, higher than market expectations of approximately $16.3 billion. Non-GAAP gross margin is expected to be approximately 55%, with operating expenses of approximately $3.75 billion. Among these, data center revenue is expected to increase sequentially by approximately 50%, client and gaming revenue to decrease sequentially by more than 20%, and embedded revenue to achieve double-digit growth.

**Warrants and Capital Structure.** Regarding warrant arrangements with customers such as OpenAI, Hu explained: Revenue guidance has already accounted for the warrant deduction based on the fair value at the grant date, requiring no further adjustment; dilution only occurs after customers meet vesting and exercise conditions, with clear guidance to be provided in 2027; quarterly non-cash fair value reassessments do not affect non-GAAP results and free cash flow. Free cash flow for the quarter was $554 million, with cash and short-term investments of $15.8 billion at period end, and total debt of $7.1 billion.

The specific content of the conference call is as follows:

## **Management Remarks**

Matt Ramsay (Vice President, Financial Strategy and Investor Relations): Welcome to AMD's fiscal 2026 third-quarter earnings conference call. Please note that this call contains forward-looking statements subject to risks and uncertainties; please refer to the documents filed by the company with the SEC. This call discusses non-GAAP measures; reconciliation tables can be found in the company's earnings press release.

Lisa Su (Chairman and CEO):

AMD delivered its highest-revenue and most profitable quarter in history. Third-quarter revenue was $13.4 billion, a 45% year-over-year increase; non-GAAP EPS was $2.09, a 74% year-over-year increase. The data center business was the largest driver, with revenue of $8.5 billion, up 97% year-over-year, accounting for 64% of total revenue, compared to 47% in the same period last year. Data center revenue growth accelerated sequentially every quarter this year.

Client and gaming business revenue was $3.7 billion, down 8% year-over-year. Of this, client business revenue was $2.9 billion, up 7% year-over-year; gaming business revenue was $773 million, down 40% year-over-year. Embedded business revenue was $1.1 billion, up 29% year-over-year, marking the fourth consecutive quarter of accelerating growth.

Regarding Data Center CPUs: EPYC Turin has become the most widely deployed EPYC generation in public clouds, with over 540 cloud instance types. Agentic workloads are becoming an important driver of CPU demand—Meta's Muse agent activated over 10 million users within 6 weeks of launch; OpenAI selected Turin as the host CPU for its first self-developed accelerator platform. The new generation of EPYC Venice processors has begun shipping, with OEM/ODM committed platforms exceeding 240, 20% more than Turin at the same stage. The company also launched the Helion rack reference design, where a full CPU rack can accommodate 144 Venice processors.

Regarding Data Center AI: MI455X has begun mass shipments, and the first Helios racks for Anthropic, Meta, Microsoft, OpenAI, and Oracle are online and operational. The company released the ROCm 10 software stack. EuroHPC selected systems equipped with MI430X for Europe's flagship supercomputer LUMI-AI, expected to go online in the second half of 2027. The company also announced the acquisition of Taalas and World Labs—World Labs was founded by AI pioneer Dr. Fei-Fei Li, who will join AMD as Chief Scientist upon completion of the transaction. Both acquisitions are expected to close by the end of the year.

Based on current visibility, we now expect 2027 revenue to grow by more than 80%, which is more than double the growth rate provided in the long-term financial model at last November's Analyst Day. Server revenue is expected to roughly double, data center AI business growth will significantly exceed doubling, and the data center segment's share of total revenue will exceed 80%.

David Hu (Executive Vice President, CFO and Treasurer):

Third-quarter non-GAAP gross margin was 56%, an increase of 190 basis points year-over-year. Operating expenses were $3.6 billion, up 29% year-over-year. Operating income was $3.9 billion, up 75% year-over-year, with an operating margin of 29%, an increase of more than 5 percentage points year-over-year. Data center operating income was $2.9 billion, up 168% year-over-year, with an operating margin of 34%, compared to 25% in the same period last year.

GAAP EPS was $1.46, which included an $1.1 billion non-cash fair value reassessment of warrants, primarily reflecting the rise in the company's stock price and changes in the probability of warrant conditions being met; this item does not affect non-GAAP results and free cash flow.

Inventory increased sequentially by approximately $3 billion to $11.5 billion; operating cash flow was $1.2 billion, and free cash flow was $554 million. Cash and short-term investments at period end were $15.8 billion, and total debt was $7.1 billion (including $4.75 billion in senior notes issued in August).

Q4 Guidance: Revenue of approximately $17 billion, ±3%, with a median year-over-year increase of 66% and a sequential increase of approximately 27%. Of this, data center revenue is expected to increase sequentially by approximately 50%, with data center AI revenue surpassing server CPU business revenue for the first time; client and gaming combined revenue to decrease sequentially by more than 20%; embedded revenue to achieve double-digit sequential growth. Non-GAAP gross margin of approximately 55%; operating expenses of approximately $3.75 billion; tax rate of 13%; diluted shares outstanding of approximately 1.67 billion (including the impact of Taalas and World Labs acquisitions).

## **Q&A Session**

Tom O'Malley (Barclays): With growth exceeding 80% in 2027, is the supply side (wafers, packaging, substrates, memory) sufficient to support it? If supply were more abundant, would actual demand be even higher?

Lisa Su: Demand exceeds supply. The company has engaged in multi-year joint planning with customers and the supply chain and is collaborating to expand the supply of wafers, substrates, advanced packaging, memory, etc. We are very confident in data center growth in 2027.

Tom O'Malley (Barclays): Client revenue is expected to drop more than 20% sequentially in Q4. What is the persistence of the PC market correction in 2027? How will AMD navigate the trough?

Lisa Su: We previously indicated seasonal weakness in the client business for the second half of the year. Component price increases are pushing up whole-machine prices, making the consumer market more sensitive to prices. The company is prudently managing inventory. We assume a double-digit decline in the PC market in 2027 and will focus on high-value segments such as enterprise, high-end consumer, and desktop channels. PC and data center supply chains are interchangeable, allowing for flexible supply allocation.

Vivek Arya (Bank of America Securities): What is your confidence in the financing and infrastructure (land, power, chassis, etc.) for the approximately 3GW of AMD deployments? Competitors offer flexible products such as residual value guarantees. What is the impact on the competitive landscape in 2028?

Lisa Su: We are very confident in the competitiveness of Venice, MI455, and Helios; we plan jointly with customers and clearly know which data centers and locations GPUs will be deployed in. For 2028 and beyond, we will prioritize investing in our own growth (R&D, supply chain) and selectively and strategically co-invest in data center infrastructure with top partners.

Vivek Arya (Bank of America Securities): How do frontier lab customers choose between self-developed ASICs and AMD products?

Lisa Su: The core is Total Cost of Ownership (TCO) advantage and tokens per dollar. The Helios rack system is a major investment by the company; Q3 was the first revenue-generating quarter for MI455 and Helios racks, with a significant increase expected in Q4. After MI450, we are developing MI500 and MI600, deeply collaborating and optimizing with frontier lab requirements.

Joshua Buchalter (TD Cowen): How does the rise in HBM costs affect the Instinct business model? Can the assumption of $15 billion to $20 billion in revenue per GW be maintained? Can costs be passed on to large customers?

Lisa Su: The company has long-term agreements with some suppliers and customers; memory and other components are facing inflationary pressures, and we are negotiating with customers to share the costs. Even with inflationary pressures, the company can still provide leading TCO for AI workloads.

Joshua Buchalter (TD Cowen): How will operating expenses grow in 2027? Can the 55% gross margin floor be maintained?

David Hu: Revenue growth in 2027 will far exceed operating expense growth (OpEx growth will be less than half of revenue growth), which will drive significant operating margin expansion in 2027. The data center AI business slightly dilutes gross margin, but gross profit dollars will increase substantially; gross margin will fluctuate quarter-to-quarter due to product mix.

Timothy Arcuri (UBS): What is the breakdown in dollar terms for GPU and CPU businesses in the data center in 2027, and what is the pacing throughout the year?

Lisa Su: In 2027, server CPU business will roughly double, and data center AI business growth will "significantly exceed doubling." Q4 is the first quarter where data center AI surpasses CPU business in scale, and both will continue to grow thereafter.

Timothy Arcuri (UBS): How will warrants flow through the revenue, share count, and expense models?

David Hu: In three parts: First, revenue guidance has already accounted for the warrant deduction based on the fair value at the grant date, requiring no further adjustment; Second, dilution only occurs after customers meet vesting and exercise conditions, with clear guidance to be provided in 2027; Third, quarterly non-cash fair value reassessments do not affect non-GAAP results and free cash flow.

CJ Muse (Cantor Fitzgerald): In the approximately 100% growth of server CPUs in 2027, what is the composition of shipment volume, core counts, and ASP?

Lisa Su: Growth mainly comes from increased shipment volume and core counts, with a smaller increase in ASP (which rises somewhat with increased core counts).

CJ Muse (Cantor Fitzgerald): What is the seasonal outlook for Q1 (client and data center)? And for embedded?

David Hu: The embedded business usually sees seasonality in Q1, but it will grow significantly throughout 2027 and strengthen quarter by quarter.

Stacy Rasgon (Bernstein): Is the crossover of GPU and CPU businesses in Q4 barely meeting the mark or significantly exceeding it?

David Hu: MI450 saw a significant sequential increase; Q4 data center AI revenue in dollar terms will be far higher than server CPU business.

Stacy Rasgon (Bernstein): Can you guide the entry and exit rates for gross margin in 2027?

David Hu: We cannot provide quarterly gross margin guidance because the business mix within the data center (AI and CPU) determines the company's gross margin, and there is currently insufficient visibility. We suggest using Q4 as a baseline (Q4 AI business share is much higher than CPU), and each quarter in 2027 may differ.

Joe Moore (Morgan Stanley): How does the Helion rack (pure CPU version) differ from traditional racks for agentic workloads? Is there an attachment opportunity for GPU blades?

Lisa Su: The Helion rack is optimized for deployment environments—hyperscale cloud uses a full CPU high-density configuration (Venice has industry-leading performance per socket), while the enterprise market can adopt a CPU+GPU hybrid configuration. The company has contributed open-source designs to OCP, and feedback from OEMs/ODMs and customers has been very positive.

Joe Moore (Morgan Stanley): Is the doubling of server growth in 2027 due to share gain or overall industry TAM expansion? Is it satisfying backlog demand or continuous shortage?

Lisa Su: Growth comes from both share gain and TAM expansion—including traditional cloud and enterprise markets, agentic CPUs, and head nodes. Demand indeed exceeds supply, and the company is working with the supply chain to expand supply (including components such as substrates and DDR5); demand is a broad expansion across the entire customer base, not driven by individual customers.

Harsh Kumar (BMO Capital Markets): What is the share target for complete Helios rack systems? Are you entering the enterprise market?

Lisa Su: The goal is to become an important computing power supplier for the largest customers (frontier labs and hyperscale cloud vendors); we are in deep discussions with our largest customers regarding MI500 and MI600. The enterprise market is developing slightly slower but is important; the company has launched enterprise-specific GPUs and hopes to expand its enterprise footprint.

Harsh Kumar (BMO Capital Markets): If competitors lower prices in the PC sector, will AMD follow suit?

Lisa Su: The company adheres to an end-to-end AI strategy (cloud to edge to client); it disciplines itself to focus on the highest-value, most profitable PC segments (enterprise, high-end consumer, desktop channels), minimizing exposure to low-end price-sensitive segments.

Moderator: The originally scheduled question from Jim Schneider of Goldman Sachs could not be connected due to line issues. The conference concluded with questions from Harsh Kumar of BMO.

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> **Disclaimer: This article is for reference only and does not constitute any investment advice.**