Advanced Micro Devices expects fourth-quarter revenue of about $17 billion, plus or minus 3%, a rise of roughly 66% from a year earlier, as the U.S. chip designer starts shipping its Helios rack-scale AI systems in volume through server makers including China's Lenovo.

The forecast, issued with third-quarter results on Nov. 3, implies a sequential jump of about 27%, the company said. For Asia, the outlook matters because AMD designs its chips but relies on outside manufacturers and server partners to turn them into finished systems. The more Helios racks AMD sells, the more orders flow to the companies that build, assemble and supply them.

On Monday, AMD added a second leg to that story. It said its 5th Gen EPYC processors are the host chips inside Google Cloud's TPU 8tx, which the companies described as the first cloud Tensor Processing Unit system to offer hardware-enforced confidential computing. AMD said EPYC is now the host processor of choice for more than 10 leading hyperscalers and frontier AI labs, across systems built on its own GPUs, Nvidia GPUs and custom accelerators.

AMD data center sales nearly double

Third-quarter revenue rose 45% to a record $13.4 billion, and diluted earnings per share were $1.46, up from $0.75 a year earlier, according to AMD's release. On a non-GAAP basis, the company earned $2.09 a share. Analysts had expected revenue of $13.09 billion and adjusted earnings of $1.94 a share, according to Constellation Research.

The Data Center segment did most of the work. Its revenue climbed 97% to a record $8.5 billion, which AMD tied to demand for EPYC server processors and the launch of its Instinct MI450 Series GPUs. Data center sales made up about 64% of total revenue, up from 47% a year earlier, Constellation Research calculated.

Other units were mixed. Client revenue rose 7% to $2.9 billion on sales of Ryzen mobile processors, while gaming revenue fell 40% to $773 million on lower semi-custom and graphics sales. Embedded revenue grew 29% to $1.1 billion.

Margins widened. GAAP gross margin was 54%, two percentage points higher than a year earlier, and operating income more than doubled to $2.8 billion. AMD guided to a non-GAAP gross margin of about 55% for the fourth quarter, slightly below the 56% it reported for the third.

Chair and Chief Executive Lisa Su said in the release that AMD expects growth to "accelerate further in the fourth quarter" as it scales Helios and "Venice" production. Chief Financial Officer Jean Hu said non-GAAP earnings per share grew 74%, which she credited to the operating leverage of the data center business.

Helios racks and Asia's server supply chain

The Helios systems pair MI450 GPUs with 6th Gen EPYC processors in a full rack. AMD said Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are already running models and workloads on the first units.

According to Constellation Research, Helios deployments are set to rise substantially in the fourth quarter as HPE, Dell, Lenovo, Super Micro and other OEM and ODM partners begin shipping systems. For Asian investors the most direct name on that list is Hong Kong-listed Lenovo, which AMD also named as a seller of PCs built on its new Ryzen AI Max PRO 400 Series chips.

Supply, not demand, looks like the constraint. Su told analysts that "demand is higher than supply," Constellation Research reported. AMD's inventories reached about $11.5 billion at the end of the quarter, up 35% from the second quarter, according to Jon Peddie Research, a build that is consistent with the company preparing for the fourth-quarter ramp.

The spending behind those orders is already on the table. AMD's named Helios customers include Meta and Microsoft, which with Amazon and Alphabet plan up to $745 billion of capital spending this year. AMD's release also noted that Google Cloud and Microsoft had made storage-optimized cloud instances on 5th Gen EPYC chips generally available.

Acquisitions and what comes next

AMD is also buying capability. It has agreed to acquire World Labs, a model research company, and Taalas, which makes specialized inference silicon, both subject to closing conditions.

The company had cash, equivalents and short-term investments of about $15.8 billion and total debt of about $7.1 billion at the end of the quarter, according to Jon Peddie Research.

The Google deal, announced on Monday, extends a partnership that already covers several generations of Google Cloud Compute Engine virtual machines. Dan McNamara, AMD's senior vice president for compute and enterprise AI, said accelerators need a host CPU that can match their demands.

The next hard number for AMD's Asian partners is the fourth-quarter print itself, due early next year, which will show whether Helios shipments landed near the $17 billion midpoint.