AMD Bets Big on AI: A Leap in Data Center Advancement

Advanced Micro Devices (AMD) forecasts higher-than-expected Q4 revenue, driven by demand for AI chips. With investments from companies like OpenAI and the U.S. Department of Energy, AMD expects $9.6 billion in revenue. Despite recent stock volatility, AMD shows strong sales in data centers and personal computers.

Advanced Micro Devices, known as AMD, has forecasted its fourth-quarter revenue to surpass market expectations, driven by the expansion of data center infrastructure and increased demand for its artificial intelligence chips. The semiconductor giant has secured significant investments from organizations like OpenAI and the U.S. Department of Energy, anticipating sustained spending on advanced processors.

While the company's shares experienced volatility, dropping about 3% in extended trading, AMD's stock has more than doubled in value this year, outpacing rival Nvidia despite the latter's astronomical market valuation. Analysts point to short-term profit-taking and fears of an AI investment bubble as reasons for the dip in AMD's share value.

In the third quarter, AMD's data center segment, particularly its AI chips, saw revenue climb 22% to $4.3 billion, beating projections. Additionally, AMD's client segment, serving the personal computer market, reported a 46% sales increase amid growing consumer demand for AI-enabled PCs. The tech company continues to ramp up production to meet rising demand, especially with a new multi-year deal with OpenAI.

(With inputs from agencies.)