What do AMD's third-quarter 2026 results say about the AI chip race?

On Tuesday, November 3, 2026, after the stock market closed, AMD reported results for its third quarter, the three months that ended September 26. Revenue reached a record $13.4 billion, up 45% from a year earlier, and the part of the company that sells chips for data centers grew 97%. AMD also forecast about $17 billion in revenue for the fourth quarter, more than analysts expected, and Reuters reports that its shares rose about 8% in after-hours trading.

AMD is Nvidia's main challenger in the graphics processors (GPUs) used to train and run AI models, though still much smaller. Its results are one of the few public, audited windows into how fast spending on AI computing is growing and who captures it. This article walks through the numbers, then looks at what the company's quarterly filing adds, including a sum the press release does not mention.

The headline numbers

The Data Center segment covers AMD's Instinct GPUs for AI, its EPYC server processors (CPUs) and related networking chips. It now brings in almost two-thirds of the company's revenue and earned $2.9 billion in operating income this quarter. AMD credits strong demand for EPYC processors and the launch of its Instinct MI450 series GPUs. Reuters reports that data center revenue beat the analyst average of $8.20 billion compiled by LSEG.

The weak spot was gaming: revenue from game consoles and graphics cards fell 40%. PC processor sales rose 7%, but Reuters reports that AMD expects PC unit shipments across the industry to fall by a double-digit percentage next year.

The forecast for next quarter

For the fourth quarter, AMD guides to revenue of roughly $17 billion, give or take 3%. That range runs from about $16.5 billion to $17.5 billion. The midpoint would be about 66% more than a year earlier and 27% more than the third quarter. Reuters gives the analyst average as $16.23 billion, below even the low end of AMD's range.

On the call with analysts, CEO Lisa Su said she expects total revenue to grow more than 80% in 2027, with data center chips making up about 80% of sales, according to Reuters. AMD links the growth to two products ramping up in the fourth quarter: Helios, a complete rack that combines MI455X GPUs and server CPUs and is sold as a single system, and "Venice," its next server CPU. The company lists Anthropic, Meta, Microsoft, OpenAI and Oracle's cloud as already running workloads on the first Helios racks.

A forecast is not a result. AMD's own release lists the risks, from export rules and memory shortages to the loss of a large customer, and a quarter that depends on a new rack system reaching volume production can slip.

Why two different profit figures?

Companies report profit under GAAP, the official US accounting rules, and many also publish a "non-GAAP" figure that leaves out items they consider unrelated to day-to-day operations. AMD's gap this quarter was unusually large: $2.4 billion under GAAP versus $3.5 billion non-GAAP.

The biggest single difference is a $1.1 billion charge tied to warrants. A warrant is a right to buy shares at a set price. AMD gave two large customers warrants for up to 160 million shares each at one cent per share, which vest only as those customers buy AMD chips and as the stock reaches target prices. AMD's June filing identifies those customers as OpenAI and Meta. When AMD's share price rises, the warrants become worth more, and the accounting rules make AMD record the increase as a cost. In other words, the better the stock does, the more these deals weigh on reported profit.

What the quarterly filing adds: guarantees for partners' data centers

AMD filed its full quarterly report, the 10-Q, on November 4. It describes a growing set of arrangements that help other companies build the data centers that will run AMD hardware:

Here is how a lease guarantee works, using round numbers. Suppose a smaller cloud company wants to rent a building to fill with AMD GPUs, and the landlord asks for 15 years of rent. The landlord may hesitate to rely on a young company's credit. AMD promises to pay the rent if the tenant defaults. The tenant gets the building, AMD gets a customer for its chips, and the landlord gets a stronger guarantor. If the tenant fails, AMD can take over the lease, use the space itself or find another tenant, but it is on the hook in the meantime.

The filing says no partner was in default and AMD had paid nothing under these guarantees as of September 26. It also notes that their accounting value was not material. The size is still growing fast: in its June quarterly report, AMD listed $4.1 billion in data center lease guarantees, so that figure nearly doubled in three months. The filing's risk section states plainly that AMD could end up making substantial payments or carrying long-term lease costs if partners fail or if it cannot pass leases on as planned.

This practice is not unique to AMD. Nvidia's July quarterly filing describes guarantees capped at $105 billion that support leases at an Ohio data center campus for an OpenAI affiliate. The guide's article on AI compute commitments explains why the maximum amounts in such deals are ceilings, not money already spent.

Cash and stock on hand

Two more numbers show the cost of growing this fast. Free cash flow, the cash left after running the business and paying for equipment, fell to $554 million from $1.6 billion in the second quarter. A big reason is inventory: AMD's stock of chips and parts reached $11.5 billion, up from $7.9 billion at the end of 2025. The release does not break that increase down, but it comes just ahead of the fourth-quarter ramp AMD forecasts. Building ahead of demand is normal before a big launch; it also means more cash is tied up if orders arrive later than planned.

What should you watch in AMD's next results?

First, whether fourth-quarter revenue lands inside the $16.5 billion to $17.5 billion range, and how much of it comes from Helios racks rather than individual chips. That shows whether AMD can sell complete systems at scale, the way Nvidia does.

Second, the guarantee and lease figures in the next filing. If the $8.5 billion in guarantees and $13.3 billion in leases keep rising faster than revenue, more of AMD's growth depends on the health of its partners. If leases are passed on to partners as planned and no defaults appear, the risk stays theoretical.

Third, free cash flow. A quarter of strong sales with weak cash can be a timing effect from inventory, but several in a row would show that growth is costing more than it brings in. None of these numbers says whether AMD's shares are a good buy; they show how the AI buildup is being financed, and by whom.