AMD’s data centre sales nearly doubled and it forecast faster growth ahead, easing fears that AI demand is fading. The results also show where AI money is flowing, which matters for Indian IT.
Advanced Micro Devices (AMD) reported record third-quarter revenue of $13.4 billion, up 45% from a year earlier and above its own forecast. Adjusted earnings per share rose 74% to $2.09, ahead of consensus estimates of about $1.94–1.95.
The data centre business drove the results. Revenue there rose 97% to $8.5 billion, nearly doubling, and made up 64% of total sales. The growth came from AMD’s Instinct graphics processors, which compete with Nvidia’s AI chips, and its EPYC server processors.
AMD forecast fourth-quarter revenue of about $17 billion, another large step up, implying accelerating growth.
Not every business grew. Gaming revenue fell 40% to $773 million, and combined client and gaming revenue fell 8%. Client revenue, mainly PC processors, grew 7%.
The shares rose 3.65% in regular trading on Tuesday to $483.90 and gained another 5–8% after hours. AMD is up about 125% this year but had fallen for three straight days before the results, amid the wider selloff in technology stocks.
Where the AI debate stands
For the past two weeks, US technology stocks have been under pressure on concerns that the largest technology companies are spending too much on AI infrastructure. Alphabet fell 12.6% in one day after reporting capital spending of $51.4 billion in a quarter and negative free cash flow. Intel fell 29% on weak guidance. The Nasdaq-100 entered correction territory, falling more than 10% from its record.
AMD’s results show the other side of that spending. The money the big technology companies are spending on AI goes, in large part, to chipmakers such as AMD and Nvidia. AMD’s data centre revenue nearly doubling, and its forecast of further acceleration, show that AI infrastructure demand remains very strong.
That answers one half of the debate. Demand for AI chips is not fading. The other half is unresolved: whether the companies buying those chips will earn a return on what they spend. AMD’s results confirm that spending by Alphabet, Amazon, Microsoft and others is continuing at a very high level, which is exactly what has worried investors in those companies.
What it means for India
For Indian investors, the implications are mixed.
Indian IT stocks fell on Wednesday despite AMD’s results. The Nifty IT index declined more than 1%, with TCS and HCLTech among the largest losers. That reflects a growing view that AI spending benefits chipmakers and cloud companies more than IT services firms. Much of the money spent on AI goes to hardware and infrastructure, while the traditional services work that Indian IT companies provide faces pressure as AI automates some tasks.
There are some potential benefits. AMD has a large engineering and design presence in India, one of its biggest research centres outside the US, and growth in its data centre business supports demand for chip design talent there. India’s push to build semiconductor manufacturing and design capacity also depends on global chip companies continuing to invest.
So AMD’s record quarter tells investors that the AI boom still has momentum, that the money is flowing mainly to chips and infrastructure, and that the services companies India is best known for are not yet the main beneficiaries.
The question for investors is how much of that boom is already priced into technology stocks, and how long the spending can continue before the companies paying for it need to show returns.
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