AMD reports better-than-expected results but margin guidance only meets estimates

Core Insights - Advanced Micro Devices (AMD) reported fiscal third-quarter results that surpassed Wall Street expectations, with a revenue increase of 36% year-over-year, reaching $9.25 billion [2][7] - The company anticipates fourth-quarter revenue of approximately $9.6 billion, indicating a 25% growth, which exceeds the consensus estimate of $9.15 billion [3] - AMD's stock has risen 107% year-to-date, significantly outperforming the Nasdaq's 21% increase [4] Financial Performance - Net income for the third quarter rose to $1.24 billion, or 75 cents per share, compared to $771 million, or 47 cents per share, from the previous year [2] - Client revenue reached $2.75 billion, up 46%, exceeding the consensus of $2.61 billion [6] - Revenue from gaming surged to $1.30 billion, a remarkable 181% increase, surpassing the expected $1.05 billion [6] Market Position and Partnerships - AMD is focusing on competing with Nvidia in the artificial intelligence processor market, with guidance excluding revenue from shipments of its Instinct MI308 chips to China [3] - A recent partnership with OpenAI could lead to the AI startup acquiring a 10% stake in AMD, with plans to deploy 6 gigawatts of AMD's Instinct GPUs over several years [4] - Oracle announced plans to deploy 50,000 AMD Instinct MI450 AI chips in its cloud services starting next year, indicating growing demand for AMD's AI solutions [5] Guidance and Expectations - AMD's adjusted gross margin for the fourth quarter is projected at 54.5%, aligning with market expectations [3] - The company will discuss its financial results and future outlook in a conference call with analysts [6]