AMD approaches Q3 earnings amid high expectations for AI and data center growth

Advanced Micro Devices Inc. (AMD) is approaching its third-quarter earnings release with investors focused on guidance regarding demand for artificial intelligence (AI) and data centers. The company's stock has surged more than 135% this year, and analysts are closely monitoring whether management will boost projections for 2027 data-center expansion.

Financial Expectations and Projections

Wall Street analysts have provided varying estimates for the upcoming report. According to a report from Zacks Investment Research, the Zacks Consensus Estimate for the September quarter is $1.94 per share, which would represent a 61.7% increase over the year-ago period. This source pegs revenue at $13.12 billion, an increase of 41.9%.

Other estimates include:

• Barchart reports that analysts expect earnings of $1.68 per share, a 73% year-over-year increase from $0.97 per share in the prior-year period.
• Barchart also notes that for Q3 2026, AMD expects revenue to increase by 41% year-over-year to $13 billion at the midpoint.
• Yahoo Finance reports Wall Street is looking for earnings of $1.94 a share and revenue expected to climb 41.5% to $13.09 billion.

Data Center and AI Growth Drivers

Demand for server processors and Instinct AI accelerators is a primary focus for the company's growth. In Q2 2026, AMD's data-center segment increased its share of total revenue to 58% from 42% in the same period last year, according to Barchart. Data-center revenue during that period climbed 107% year-over-year to $6.7 billion.

Zacks Investment Research reports that analysts are modeling data center revenue at $8.27 billion for the current quarter, which would represent a 90.6% growth and place the segment at roughly two-thirds of total company revenue.

Regarding future projections, management has indicated that server CPU revenue is expected to increase by more than 80% year-over-year in the second half of 2026. For full-year fiscal 2027, server CPU revenue is projected to grow by more than 70% year-over-year from a significantly higher base. Additionally, the company expects data-center segment revenue to more than double year-over-year in 2027.

Market Position and Contracts

Zacks Investment Research notes that AMD holds capacity reservations from several major buyers. In October of last year, OpenAI agreed to deploy up to six gigawatts of AMD Instinct accelerators, starting with one gigawatt of MI450 silicon in the second half of 2026. In February, Meta signed a multi-year agreement for up to six gigawatts of its own, built around a custom Instinct GPU based on the MI450 architecture, paired with sixth-generation EPYC processors and AMD's Helios rack-scale design. Anthropic is also identified as part of this group of buyers.

Zacks Investment Research notes that the Meta deal includes a performance-based warrant for up to 160 million shares of AMD stock, which vests as shipments scale toward six gigawatts and as the share price clears defined thresholds. The report states this warrant alone represents potential dilution near 9% against roughly 1.85 billion shares outstanding.

Why it matters

Investors are looking to see if AMD can deliver on its existing sales and navigate supply chain constraints in wafers, packaging, and high-bandwidth memory. The upcoming report will serve as a significant indicator of whether AI capital spending is converting into real revenue and cash flow.

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Sources

• ca.finance.yahoo.com: AMD Heads Into Earnings With AI Guidance in the Spotlight
• barchart.com: What to Expect From AMD’s Q3 Earnings
• theglobeandmail.com: AMD Threatens False Breakout Ahead of Earnings - The Globe and Mail

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.