Massive data center growth and a gaming slump
AMD reported $13.4 billion in third-quarter revenue, which is a 45 percent increase year-over-year. The data center segment grew 97 percent to $8.5 billion, while gaming revenue plummeted 40 percent to $773 million. CEO Lisa Su attributed this gaming decline to "lower semi-custom sales as expected at this stage of the console cycle." I find this 40 percent gaming collapse a massive failure. The gaming segment includes semi-custom processors for consoles and Radeon graphics, but Ryzen processors belong to the client business, which posted $2.95 billion, up 7 percent year-over-year, because of Ryzen mobile chip sales. Embedded segment revenue hit $1.1 billion, a 29 percent increase, following gains in aerospace, defense, automotive, communications, and industrial markets.
Future hardware and revenue projections
Data center operating income rose 168 percent to $2.88 billion, as margins climbed from 25 percent to 34 percent. This growth came from EPYC server CPUs and the launch of Instinct MI450 series GPUs. AMD expects fourth-quarter revenue to reach approximately $17 billion, plus or minus 3 percent, which signifies 66 percent year-over-year growth because projections are 27 percent higher than this quarter’s results. This guidance would allow AMD to exceed Intel’s estimated $15 billion to $16 billion fourth-quarter revenue for the first time in history, even as Intel’s own guidance remains more conservative.
| System | Processor | Graphics/Memory |
|---|---|---|
| Threadripper Halo Station | Threadripper 9995WX | 4x Instinct MI350P |
| Project Zenith | Ryzen AI Max+ PRO 495 | 192GB unified |
AMD shipped MI455X in volume this quarter to customers including Anthropic, Meta, Microsoft, OpenAI, and Oracle, who brought their first Helios racks online quickly. The company also announced Project Zenith, a Windows-based system using the Ryzen AI Max+ PRO 495 processor on the PRO 400 Series platform to support a developer-focused Windows experience. It provides 192GB of unified system memory, including 160GB for graphics, and runs 300 billion-parameter models at 4-bit quantization. The Threadripper Halo Station, which was first shown at IFA in September, pairs a Threadripper 9995WX CPU with up to four Instinct MI350P GPUs and can run trillion-parameter LLMs locally. This system arrives in 2027 with pricing still unannounced.
