Advanced Micro Devices (AMD) will release its third-quarter 2026 financial results on Nov. 3. Growing artificial intelligence (AI)-driven demand for AMD's products has powered its top and bottom lines higher, and in turn its stock price.
This momentum will likely continue in Q3, with top-line growth expected to remain solid. Profitability is also expected to remain strong, supported by a more favorable product mix. Together, these factors could continue to support the ongoing rally in AMD stock.
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AMD's Q3 Outlook
AMD is expected to maintain strong growth in Q3, supported by robust demand for EPYC server processors and Instinct AI accelerators. The company forecast Q3 revenue of $13 billion, implying 41% year-over-year (YOY) growth. However, given the strength of its data-center business and a solid recovery in the embedded segment, AMD could exceed its internal guidance.
On a sequential basis, revenue is projected to increase by approximately 13%, reflecting double-digit growth in both the data-center and embedded segments. However, the client and gaming segment is expected to experience a modest decline.
The data-center business remains the key growth driver. In Q2, segment revenue reached $6.7 billion, up 107% YOY. Server CPU sales rose by more than 70% YOY, supported by record enterprise sell-through and sustained demand from cloud service providers. Growing adoption of AMD’s latest Zen 5 architecture drove higher processor shipments and average selling prices (ASPs).
www.barchart.com AMD’s AI accelerator business also delivered substantial gains, with Instinct revenue up significantly. Solid adoption of the MI350 series across a diversified customer base supported growth.
This momentum is expected to continue in Q3. AMD’s server CPUs are expected to deliver solid growth throughout the second half of the year, supported by strong demand across hyperscale cloud providers and enterprise customers. AMD projects double-digit sequential growth in the data-center segment, with both server CPUs and data-center AI products contributing meaningfully to the expansion.
Demand for Instinct accelerators is expected to remain strong as well. In Q2, adoption of the MI355X “continued to broaden as leading AI companies scale deployments across a growing range of inferencing and training workloads."
Alongside strong revenue growth, AMD is expected to sustain its earnings momentum. The expansion of the server CPU business, supported by a growing total addressable market (TAM), is expected to cushion profitability. Management has indicated that the server business is becoming increasingly accretive to the company’s overall gross margin, strengthening the earnings outlook.
AMD projects an adjusted gross margin of approximately 56% for Q3, up from 54% in the same quarter last year. Higher revenue, a favorable product mix, and improved margins are expected to support bottom-line growth. Analysts anticipate earnings of $1.68 per share, up about 73% YOY.
Overall, AMD’s Q3 outlook remains strong, driven by demand for EPYC server CPUs and Instinct AI accelerators. The company's robust top-line growth and improving gross margins are expected to drive substantial YOY earnings growth.
Analysts Remain Bullish on AMD Stock Ahead of Q3
AMD’s Q3 2026 results should reflect sustained momentum in its data-center business. Revenue growth, an improving product mix, and higher gross margins will support significant YOY earnings growth.
While AMD stock trades at a high valuation, its strong earnings growth trajectory justifies its elevated multiple. The forward price-to-earnings (P/E) ratio of 79.5 times appears reasonable, as analysts expect EPS to more than double in fiscal 2027 to $14.14 per share.
Analyst sentiment toward AMD stock remains positive ahead of Q3 earnings. Overall, Wall Street has a consensus “Strong Buy” rating for AMD stock.
www.barchart.com On the date of publication, Amit Singh did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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