AMD’s Amazingly Strong Q3 Results

AMD continues to showcase the benefits of focused management and solid execution. This quarter, (3rd quarter 2023), represents impressively strong results in what has been an uneven market with nervous customers and ever higher interest rates collectively creating a drag on sales outside of AMD’s control. And this wasn’t a one-shot, either. AMD’s outlook is also very positive and aggressive. Given AMD CEO’s Lisa Su tends to be conservative in her outlook, that is a good thing. 

Let’s talk about some of the high and lowlights of AMD’s financial results.

Data Center

AMD’s data center efforts were particularly powerful in what has been a relatively soft market due to high capital costs and concerns about consumer demand (which has stayed surprisingly strong).  While the related revenue was flat year-over-year, it was up 21% sequentially, showcasing impressive sales performance last quarter in a soft market. AMD reported double digit growth in the Cloud. 

In addition, AMD reported that Dell, Lenovo, Supermicro and several others launched new EPYC CPU platforms, increasing the total available market for the parts in telco, retail and manufacturing applications. 

EPYC has been doing surprisingly well and I’ve heard from several OEMs that they are impressed not only with the part but with AMD’s execution over the last 5 to 10 years. While other firms seemed to struggle through downturns and were forced to downsize, AMD just plugged along, and this resulted in consistency, reliability and increased trust between AMD and the OEMs it services. 

AMD’s MI300X AI-focused GPU platform also saw a huge uptick to around $300M against an earlier estimate closer to $200M.  MI300a GPUs weren’t material in volume given they just started production recently, but demand is reported to be high and projections for these products are expected to be very strong well into 2024, especially given AI demand is through the roof.  

AMD got some good news from Lamini which announced the achievement of software parity with NVIDIA’s CUDA when running AMD’s MI250 AI GPU accelerators. Since the newer parts perform at even higher levels, competition in this segment is clearly speeding up.

As a result, AMD expects that the MI300 family will be the fastest product to ramp up to $1B in revenue in AMD’s history. 

PC Business

AMD hit the ball out of the park in this segment with annual revenue growth (year-over-year) of a whopping 42% (46% sequentially) doing $1.5B in related revenue. It drove down inventory levels sharply as the Ryzen 7000 was particularly strong.  Client CPUs powered by the Zen 4 core increased by more than 100% sequentially and AMD continues to dominate in the high-end workstation segment with its new Threadripper Pro workstation CPUs (also based on the Zen 4 core). These Threadripper Pro workstations are amazingly powerful. Bringing them to market represented a substantial risk that obviously paid off. Again, this shows that it often takes big risks to move against an entrenched powerful competitor and Intel is both. Dell, HP and Lenovo (who pioneered these machines) have all announced new workstations based on the latest version of Threadripper.

Looking forward, AMD is in lockstep with Intel and Qualcomm about AI and hybrid AI growth in the enterprise and anticipate a huge amount of demand once buyers fully understand the productivity increases associated with using advanced generative computing solutions like Microsoft’s Copilot.  


Gaming took a hit with an 8% decline largely due to aging gaming consoles. This is unlikely to recover until the consoles are refreshed but a full refresh isn’t due until 2025/26 (though Microsoft is expected to have an update in 2024 which could result in more demand next year for that platform).  

It’s just the nature of the console market, which is a razor and blade market. The consoles are sold at or near cost and the vendors make their money off content. There is no real incentive to fast refresh, so you get these typical hills and valleys which AMD has no control over.  

Wrapping Up:

AMD had an impressively strong quarter due to high focus, impressive execution, and willingness to take risks with products like Threadripper Pro (I still wonder what would happen if it had created a similar product in its graphics line.) Since engineers and gamers chase performance, the upside should be equally fascinating were this done like Threadripper was done.  

In the end, AMD leaves the quarter stronger than when it began and well positioned for the coming wave of hybrid AI and the amazing things we’ll be doing with these LLM (Large Language Models) for our near-term AI future.