ATC

Advanced Micro Devices (AMD) stock jumped over 5% in after-hours trading on Tuesday after the company beat Wall Street estimates for its third-quarter results. The rally followed record revenue and stronger Data Center sales. However, the biggest boost came from AMD's 2027 outlook, as CEO Lisa Su expects revenue to grow more than 80% next year. Strong demand for server CPUs and AI chips is driving that forecast, while the company sees further growth ahead.

Following the results, Goldman Sachs analyst James Schneider reiterated a Buy rating and a $700 price target on the stock. The 5-star analyst said, "We expect the stock to trade higher following stronger results and guidance." Schneider said investor expectations had fallen after Intel's (INTC) weak outlook last week, making AMD's results and forecast more encouraging. He also pointed to Data Center strength and better-than-expected gross margins as positives.

AMD's Data Center Revenue Nearly Doubles

AMD reported record Q3 revenue of $13.38 billion, up 45% year over year. Adjusted earnings reached $2.09 per share, beating Wall Street's $1.95 estimate.

Much of this growth came from its Data Center business. Revenue in the segment rose 97% to $8.55 billion, driven by strong demand for EPYC server processors and Instinct GPUs. It now accounts for about 64% of AMD's total sales.

Elsewhere, Client revenue climbed 7% to $2.9 billion. Gaming sales, however, fell 40% to $773 million. The Embedded division offered another bright spot, with revenue rising 29% to $1.11 billion.

AMD Raises the Bar With Its 2027 Outlook

The outlook was the biggest surprise for investors. AMD expects fourth-quarter revenue of about $17 billion, plus or minus 3%. That is above Wall Street's $16.29 billion estimate and implies about 66% annual growth.

More importantly, Su said AMD expects total revenue to grow more than 80% in 2027. Server revenue is expected to double, while Data Center AI revenue could grow more than twofold.

Management also said demand continues to exceed supply. AMD is working with suppliers to secure more wafers and advanced packaging capacity to meet customer orders.

AMD Expands Its AI Computing Push

AMD is also moving beyond individual chips toward complete AI systems. Its Helios rack-scale systems are being tested by Meta (META), while collaborations with OpenAI and Anthropic could provide further opportunities for long-term growth.

These partnerships could help AMD gain more ground in AI infrastructure. Investors will now watch whether these relationships translate into sustained orders and greater market share.

Is AMD Stock a Buy, Sell, or Hold?

Wall Street has a Strong Buy consensus rating on Advanced Micro Devices stock based on 30 Buys and six Holds. The average AMD stock price target of $663.93 implies 37.2% upside potential.