AMD’s AI Boom Puts It On Track To Outsell Intel For The First Time – Analysts See More Room To Grow
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AMD reported stronger-than-expected third-quarter results and forecast fourth-quarter sales above Wall Street estimates.
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Based on company estimates, AMD’s Q4 revenue will top Intel’s.
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Last week, Intel’s weaker-than-expected forecast and warning on challenges in the PC market dragged its shares.
Advanced Micro Devices (AMD) on Tuesday forecast December-quarter sales above Intel’s (INTC) outlook last week. If both companies meet those targets, AMD would outsell Intel for the first time in their history.
AMD reported stronger-than-expected third-quarter results and forecast fourth-quarter sales above Wall Street estimates. The company also said it expects sales to grow 80% in 2027, buoyed by demand for data center chips. Its shares rose 3% in overnight trading.
The results were in contrast with those from Intel, which guided Q4 sales below expectations and flagged persisting weakness in the PC market. Notably, AMD expects Q4 sales of about $17 billion, compared to Intel’s forecast of $15 billion to $16 billion.
AMD’s Data Center Pivot Bears Fruit
AMD is increasingly pivoting to the lucrative data center segment to drive growth.
Sales of data-center chips nearly doubled from the year-earlier period to $8.5 billion. The segment now accounts for 64% of its overall revenue, compared to 47% a year ago.
“The third quarter was the largest and most profitable in our history as we began ramping our next-generation data center products,” AMD CFO Lisa Su said on the analyst call. AMD outlined gains from partnerships with big AI companies and strong sales for a suite of new products such as Helios and Venice.
Last week, Intel shares plummeted more than 20% in a day after its report, with investors growing concerned that the company is too reliant on income from consumer products like PCs and doesn’t have enough of a foothold in AI.
Analysts Praise AMD’s Move To Capture AI Market
“A few years ago AMD was the scrappy underdog fighting for scraps of Intel’s market. Now AMD’s quarter is bigger than Intel’s whole business,” Nicholas Mugalli, CEO of World Trade Securities, said in an X post.
“Everyone assumed $AMD would get dragged down with it (Intel’s report) and the stock sold off 25% from its high. Instead AMD guided way above the Street. That’s the difference between a company stuck in PCs and a company riding AI,” he said.
AMD stock fell over 17% in the final two days of last week following Intel’s earnings.
