AMD delivers Q3 beat and raise

Core Insights - AMD's stock performance has been stable, with shares slightly higher after reporting earnings that exceeded expectations, but investors are focused on margins and AI growth potential [1][2][3] Financial Performance - AMD reported a solid earnings beat and is guiding for 25% revenue growth in Q4, which is better than consensus but below some investors' aggressive expectations [3] - The legacy PC chip business continues to drive sales, with its revenue more than triple that of data center growth [4] AI Business Outlook - AMD has secured significant partnerships with OpenAI, Oracle, and the US Department of Energy, which are expected to scale its AI business into the tens of billions, but not until 2027 [3] - There are concerns regarding the profitability of AMD's new AI business, as gross margins were in line for both Q3 and Q4, raising questions about future revenue from AI [5] Market Context - AMD faces challenges with China exports not contributing to current results, and the upcoming investor day is anticipated to provide more insights [5] - The competitive landscape shows AMD trailing behind rivals in the AI chip market, with Qualcomm and Nvidia set to report earnings soon [5][6] Industry Trends - OpenAI's enterprise business has reached 1 million business customers, with significant growth in paid seats for ChatGPT enterprise, indicating a strong demand for AI solutions [6][7] - The question remains about when the substantial AI revenue will materialize, as current earnings reports do not reflect the anticipated growth from AI partnerships [9][10]