AMD Shares Slip Despite Strong Revenue Forecasts for Data Centre Expansion

Advanced Micro Devices (AMD) reported a third-quarter revenue forecast that exceeded Wall Street estimates, driven by robust demand for its chips used in data centre capacity expansions for AI technologies. The company projects revenue of approximately US$13 billion, plus or minus US$300 million, while analysts had estimated US$12.52 billion.

Despite these projections, AMD shares fell nearly 9% in extended trading. According to the original publisher, this reaction indicates that investors were seeking an even stronger outlook, particularly after the stock’s value more than doubled this year amid broad optimism surrounding artificial intelligence.

AMD, which is considered the closest competitor to Nvidia in the graphics processing unit market, continues to benefit as major technology firms and governments globally increase spending on AI infrastructure. The company’s expected adjusted gross margin for the quarter is approximately 56%, which aligns closely with analyst predictions.

Looking toward the longer term, AMD CEO Lisa Su stated that the company expects its data-centre sales to more than double by 2027. Furthermore, the company forecasted total revenue growth exceeding its 35% target and annual earnings surpassing its US$20-per-share goal set during its 2025 analyst day.

The market response underscores the high pressure facing major chipmakers in the current economic landscape. As analyst Jacob Bourne of Emarketer noted, AMD is now in a position similar to Nvidia and major hyperscalers, where the primary focus for investors is finding clear evidence that massive infrastructure spending on AI will continue to translate into accelerating financial returns. For Malaysian investors tracking the tech sector, this indicates a high bar for performance as chip companies look to prove the long-term sustainability of the AI boom.