Supermicro Semiconductor Corporation ( Advanced Micro Devices, AMD) announced its third-quarter results on Tuesday, which exceeded Wall Street's expectations, with revenue growing by 45% and data center sales nearly doubling compared to the same period last year. The stock rose by 7% in after-hours trading.

According to the consensus market expectations summarized by LSEG, the performance of this chip manufacturer for the quarter is as follows:

• Adjusted earnings per share: $2.09, compared to an expectation of $1.95.
• Revenues: $13.38 billion, with an expectation of $13.09 billion.

AMD stated in its report that revenue exceeded $9.25 billion, which is 92.5% higher than the same period last year.

AMD CEO Su Zifeng ( Lisa Su ) stated in a press release that she expects the growth of the data center processor business to "further accelerate," and mentioned that meeting demand will not be a problem.

In his statement, Su Zifeng said, "With our leading product portfolio and the strong relationships we have established with customers and our supply chain, we are confident of achieving very strong revenue growth in the coming years and expanding our profitability."

A few days before AMD released its financial report, Intel also disclosed similar data on data center growth, with its business segment experiencing a 78% increase in revenue in the third quarter. However, due to market concerns regarding its weak performance guidance and its ability to meet demand, Intel's stock price plummeted by 29% last Friday.

Data center business currently accounts for a large portion of AMD's overall operations, accounting for 64% of total revenue, which is higher than the 47% from the same period last year.

After years of catching up with NVIDIA in the artificial intelligence graphics processor ( GPU ) market, with the rise of proxy-based AI applications such as Muse from Meta, the central processing unit ( CPU ) business of AMD is seeing a significant turnaround. The servers CPU of AMD are crucial for proxy-based applications, as they provide computing power for virtual machines and can operate autonomously for extended periods. The demand driven by proxy-based AI pushed the stock price of AMD to a record high in October.

PC Market under pressure

AMD's stock price has risen by approximately 125% this year, but before the rebound on Tuesday, it experienced three consecutive trading days of decline. This was due to market concerns about excessive spending in the AI sector, leading to a sell-off across the entire industry.

AMD is also a major player in the PC market. Last week, Intel attributed its poor prospects to the weakening of the PC market. AMD and Intel are the two major manufacturers of traditional x86 processors, which power many laptops and desktop computers; whereas some other laptops use processors based on the Arm architecture from companies such as Qualcomm and Apple.

Counterpoint Research data shows that due to the soaring costs of memory and other components, global PC shipments decreased by 4% in the second quarter compared to the same period last year.

AMD has combined the sales of PC chips with gaming chips in the same business segment for disclosure. The revenue from this business decreased by 8% year-on-year to $3.7 billion. Among them, the revenue from the gaming business decreased by 40% year-on-year.

For the fourth quarter, AMD indicates that the estimated revenue is around $17 billion, which is higher than the average forecast of $16.2 billion by analysts as reported by LSEG. According to StreetAccount data, AMD expects a gross margin of 55% for that quarter, which is slightly lower than the average forecast of 55.3%.

AMD also sells data centers GPU as well as a whole cabinet-level system named Helios, which directly competes with NVIDIA's Grace Blackwell and Vera Rubin. Meta, Microsoft, Anthropic, OpenAI, and Oracle have all begun using AMD Helios in their data centers. Meta stated last week that its Helios cabinets have been put into operation, and AMD also intends to invest $1 billion in the equity issuance of Meta.

AMD also promised to invest up to $5 billion in Anthropic. Anthropic released its much-anticipated prospectus last week and is gradually approaching what could be a historically significant initial public offering.

During her visit to Taiwan in October, Su Zifeng stated that she plans to "significantly increase our supply capacity by 2027." Since the beginning of this year, both Su Zifeng and NVIDIA CEO Jensen Huang have made multiple trips to Taiwan and South Korea, meeting with key suppliers such as TSMC, as well as storage chip leaders SK Hynix, and Samsung.

In September of this year, AMD announced that it will acquire World Labs through a all-stock transaction worth $8.2 billion. This San Francisco-based AI laboratory was founded by industry pioneer Fei-Fei Li and is developing what is known as the "World Model," which uses 3D simulations to assist in the development of robots and other AI applications that are closely related to the physical world.