AMD’s $300 Billion Moment: Can Lisa Su Turn AI Hype Into Real Profits Tonight?

Advanced Micro Devices reports third-quarter earnings Tuesday after the bell, and expectations could not be much higher. The stock has surged more than 50% in the past month on the back of its multibillion-dollar artificial intelligence partnerships, most notably with OpenAI and Oracle, and it remains one of the market’s most closely watched proxies for the next phase of the AI investment cycle. That rally, however, has left little room for disappointment. Even a solid quarter may not be enough if management doesn’t deliver a convincing case that AMD’s data center momentum is translating into meaningful AI revenue and durable margin expansion heading into 2026.

Wall Street expects AMD to report earnings per share of $1.17 on revenue of roughly $8.7 to $8.8 billion, representing growth of about 28% year over year. The company’s own guidance from its second-quarter release projected revenue of approximately $8.7 billion, plus or minus $300 million, and a non-GAAP gross margin near 54%. Analysts see Q4 revenue rising to about $9.2 billion with earnings per share of $1.32, implying continued sequential growth driven largely by data center and client computing. AMD has beaten EPS estimates in three of the past four quarters, though the stock reaction has been uneven—reflecting the heightened sensitivity around its AI commentary rather than near-term numbers.

CEO Lisa Su and CFO Jean Hu are likely to stress that demand for the company’s Instinct MI350 series of accelerators continues to strengthen and that AMD’s EPYC CPU franchise remains a consistent share gainer in the cloud and enterprise server markets. Analysts at Susquehanna and Citi both expect upside in data center revenue, aided by strong server shipments and Intel’s ongoing supply constraints, while PC-related pull-ins should provide an incremental lift. Still, with shares trading around record highs and major sell-side firms such as Bank of America, Wolfe Research, and Jefferies recently lifting their price targets to $300, the setup leaves little margin for error.

The centerpiece of investor focus will be AMD’s expanding AI footprint. Over the past several weeks, the company has announced a series of partnerships that could reshape its long-term growth trajectory. The headline deal with OpenAI calls for AMD to provide up to six gigawatts of GPU compute power to build out the startup’s next generation of AI data centers. In return, OpenAI received warrants to buy as many as 160 million AMD shares—about 10% of the company—if it meets specific deployment milestones tied to both compute capacity and AMD’s share price, with the final tranche vesting at $600 per share. AMD expects the OpenAI arrangement to generate “tens of billions” in annual revenue over the life of the agreement and has characterized it as highly accretive to growth and earnings. The rollout begins with the MI450 platform, expected to ship in the back half of 2026.

In parallel, AMD signed a deal with Oracle Cloud Infrastructure to deploy 50,000 AI GPUs starting in the second half of 2026. That contract extends the collaboration between the two companies and positions AMD as a core supplier in Oracle’s high-performance cloud offerings. Meanwhile, the company is supplying chips for two new Department of Energy supercomputers—Lux and Discovery—being built in partnership with Hewlett Packard Enterprise, Oracle, and Oak Ridge National Laboratory. Valued at around $1 billion, those systems will use AMD’s MI355X GPUs along with its EPYC CPUs and networking technology. These projects showcase AMD’s growing credibility as a full-stack AI and high-performance computing provider, bridging semiconductors, systems, and software.

For the third quarter itself, investors are looking for data center revenue of roughly $4.1 billion, up from $3.5 billion a year earlier, and client segment sales of $2.6 billion, up 38%. Gaming revenue is expected to contribute about $1.1 billion, reflecting a rebound from last year’s cyclical trough. The data center and AI segments are expected to generate $2.4 billion and $1.7 billion in revenue, respectively, according to FactSet. Analysts expect gross margins near 54%, consistent with guidance, though the mix of GPU revenue—initially at lower margins—will determine whether AMD can sustain or expand that level into 2025.

While the company’s AI narrative is the clear catalyst, management will also have to navigate questions around export controls, supply-chain readiness, and product phasing. The U.S. government’s tightened restrictions on advanced chip exports to China caused AMD to take an $800 million inventory write-down last quarter, and the company excluded MI308 China revenue from its guidance. Su has said multiple export license applications remain under review. Another issue is timing: several customers appear to be delaying MI355x purchases while waiting for the MI450 rack-scale systems launching next year. UBS analyst Timothy Arcuri has cautioned that “many customers seem to be pausing on MI355x and waiting for MI455 racks,” though he and others expect this to be a temporary lull rather than a structural issue.

On the positive side, AMD’s partnerships with OpenAI, Oracle, and government agencies are expected to more than offset any near-term weakness. The company’s ROCm software stack continues to mature, and its rack-scale Helios platform, built around the MI450, is expected to serve as the foundation for multi-gigawatt deployments by hyperscalers. Bank of America recently called AMD’s Helios launch one of the “most visible near-term AI catalysts” in the semiconductor space, highlighting the potential for $10 to $11 in annualized EPS power by 2027 if execution remains on track.

Still, sentiment heading into earnings is mixed after such a strong run. Some investors worry the setup resembles other “sell-the-news” reactions seen recently in AI names like Palantir. The stock is up 114% year-to-date and 83% over the past twelve months, leaving even bullish analysts wary of valuation risk if results or guidance fail to clear expectations. AMD will need to demonstrate that its AI systems business is compounding now, not just in 2026, to justify its current multiple.

If AMD can deliver clear data center strength, reaffirm 2025 growth above consensus, and show continued traction with its AI partners, the rally may have further room to run. But with perfection already priced in, even a modestly cautious tone could prompt another bout of profit-taking. The real test will come not from tonight’s numbers but from the conviction management conveys about AMD’s role in powering the next wave of global AI infrastructure.