Benzinga on $AMD (Nov 3, 2026)

Greetings. AMD's third quarter 2026 Welcome to the quarterly conference call. Thank you, and AMD's third quarter of 2026 Regarding the quarterly financial results Welcome to the conference call.

Before we begin, I would like to point out that AMD with the financial community this quarter Will participate in the following events: Tuesday, December 1st UBS Technology & AI Conference and Wednesday, 9th December 24th Annual Berkeley's Global Technology Conference.

Our next generation Increased production of data center products As a result of starting the third quarter, we was the largest and most profitable in history. Record sales of Epic and Instinct And as a result of strong embedded growth Revenue increased by 45% compared to last year. It reached $13.44 billion.

Earnings per share grow faster It rose 74% to $29. This We did very well in the quarter, Where Helios is planned to Production has increased and the cloud, Enterprise and Super Intelligence Epic usage across workloads Expanded.

Data center every quarter this year Revenue growth continues accelerated and in the third quarter This department contributed 64% of the total revenue. , which was 47% just a year ago.

We hope that inference and agentic The increased workload demands and our The fourth quarter was driven by increased production of new products. This momentum will continue in the quarter as well.

, data center revenue in the server sector has Record 8.5, up 97% year-on-year Reached billion dollars. Cloud and Sales in both enterprise and It has more than doubled compared to last year.

As revenue share increases, we Our growth rate of over 80% is Significantly exceeded forecasts I'm gone.

Customers are more into apps Started using Epic and Agentic in the cloud Workloads are experiencing significant growth Contributed. Hyperscalars ( Hyperscalers) more this quarter To run internal services and Huge effort to expand public cloud offerings Epic has set up servers in large numbers.

Turin (Turin) is now the most in the public cloud The widely used Epic Generation, whose Over 540 instance types From the largest providers worldwide Available from. Cloud providers also saw growth this quarter.

Personal and Enterprise Agents Significant amount of epic capacity for added, which is for CPUs in the cloud Quickly becoming the next killer app.

Meta's Muse and OpenAI- Its (OpenAI) dots show that personal How fast are agents growing, where is the first More than 10 million people in six weeks Muse has activated the agent.

Enterprises are also moving forward quickly. and software development, supply chain and agents across IT operations It's working. These agents are applications and Across enterprise systems Works continuously and in parallel , which will increase the demand for accelerators In addition, there is a demand for CPU Causes significant growth.

Its use has just begun and we hope I am doing that agents are more widely As it is deployed and more complex Demand will increase rapidly as work is undertaken.

In the case of head nodes, we have this Several of the largest models in the quarter With developers and cloud providers I want to do a large-scale deployment, which It will increase further in the coming quarters.

Large Proven Epic leadership in range Performance and mature ecosystem This is for custom accelerators. The preferred host has turned into a CPU.

A For example, in the enterprise Their first custom accelerator Host CPU for platforms As OpenAI Turin Epic ( Turin Epic) processor selected.

New and strong support from existing customers Due to demand, Epic Server sales are at a There was a record. This quarter we have dozens of We have added new Epic customers, including There are major financial services, communications, Retail and healthcare companies.

Existing Customers also choose Epic as their primary compute is adopting it as a platform, which results in Its use depends on specific workloads. A larger part of their overall infrastructure Expanding in parts.

We are launching Epic Venice in the third quarter. Venice) Processor revenue invoice begins and the first OEM systems It is on track to be available this quarter.

For any new Epic generation we are now The most powerful primary so far I saw the demand. Our OEM and ODM Partners More than 240 Venice Committed to the platform which is 20% more than Turin, and Cloud providers will start offering Before the planned instance rollout towards Venice is setting up this quarter.

We We recently launched Helion, which is a Venice Reference Design and it's Agentic Turnkey Epic for Infrastructure Enables rack scale systems.

Customers All CPU Racks for Hyperscalers Starting from Venice and Instinct Up to enterprise systems with GPUs Configure Helion for their workload can do, which agents and models do together Can drive.

In an all-CPU configuration, a single Helion 144 with about 74,000 threads on the rack There are up to Venice processors, which Highest agent density in the industry Provides.

Every major server OEM and ODM is The first systems are shipping in the quarter. Helion is planning to offer via . Looking more broadly, Cloud, Enterprise, Agentic and Super Intelligence Infrastructure The demand for server computing is growing rapidly.

Epic is the industry's most comprehensive Portfolio that covers all these markets Includes. It's about the cloud and the agent. For per-rocket leadership, enterprise and per-core leadership for the head node and Tailored for every workload Provides memory and IO options.

Venice built on that leadership and Any x86 or ARM server CPU Compared to per watt, per core and per Significantly improved performance in dollars Provides.

This will increase our shares. and significantly boost the server business will help increase, because by 2030 TAM (potential market share) by 2020 ) will reach about $220 billion.

Our data center is geared towards AI business Looking at it, Frontier Labs, Hyperscalers and cloud providers For inferencing and training Instinct has expanded deployment, Which brought in a record amount of revenue.

We are shipping a large quantity of MI455X this quarter. I started sending and Entropic, Meta, Like Microsoft, OpenAI, and Oracle Major customers quickly received their first Helio The racks have been turned on.

Customers can now purchase their latest model on Helio and running the workload and we Very early deployments I see strong performance. We expect that in the fourth quarter Helios deployment significantly will increase, because production is constantly increasing And HPE, Dell, Lenovo, Super Micro and other OEM and ODM partners The system is starting to deliver.

The overall performance that we achieve at the rack level We are very pleased with the performance. Satisfied. Compute flops, memory Capacity and scale out bandwidth The MI455X is ahead.

And Helios in the market As it comes, it is comparable to competitors Memory bandwidth and higher scaleup Will create a bigger gap in bandwidth. We are using the current standard deployment To increase production accordingly, we Work closely with production partners I am doing it.

In the case of supercomputing, Euro HPC Instinct MI430X for Lumi AI GPU and sixth-generation Epic processor has elected, which is due in 2027 Planned to launch in the second half Europe's next flagship Supercomputer.

MI430X Competitors Almost nine times more than double Delivers precision performance, which Very useful for scientific simulations Important. As a result, around the world Powering next-generation systems MI430X is now selected for provisioning. , and governments and research centers are Planning the next big investment We also win additional designs. I am in a convenient position for.

In terms of software, we are on a large scale Large for production deployment We have launched Rockom 10 with improvements, including There are large GPU clusters that are fast Startup and long-term workloads For greater flexibility.

Agenda via rockom.ai on Rockom 10 Performance tuning has also been added, Which profiles the workload, the bottlenecks Identify and implement improvements verified, resulting in a few weeks Engineering optimization is in our hands. It comes.

Customers also use our open software To optimize their model in the stack Using their own agent.

For example, Anthropic noted that An engineer uses Claude Their latest model in the Instinct MI355X Strong in just one weekend Launched with performance.

Our work with Frontier Labs Already their models for Inst Complex software development and Enables performance tuning Lifting.

And since these capabilities are constantly Improving, benefiting the AMD ecosystem It is reaching everyone. Our super intelligence portfolio We are strengthening this quarter We have announced two acquisitions.

Talos A highly experienced engineering team and less For efficient inference in latency Made with specialized silicone.

Less Latency's super intelligence Growing demand for applications We are expanding our solution portfolio to meet to integrate their technology across Planning. Co-founder and CEO Dr. FE Li World Labs is a Bringing together a world-class research team, whose Spatial intelligence and the physical world Models that understand have skills , which is our frontier model and How workloads are evolving Will give deep insight into the relationship.

FE Joins AMD as Chief Scientist Give, lead our model research And our future hardware, Creating software and system roadmaps Will help. We hope that these two The acquisition will be completed by the end of the year.

Looking to the future, our focus On large-scale implementation. Venice, Production of the Mi 450 series and Helios Growth is still in its early stages and All three have increased significantly. On the way.

We are now hoping that the fourth The data center segment in the quarter Revenue growth will accelerate and by 2025 Full year segment revenue from 2018 It will be more than double.

Until 2027 Our forecast also continues to strengthen. Happening. Last quarter we said that, Annually, as per our expectations Server revenue will increase by more than 70%. And this year the data center segment Revenue will more than double.

Since then, customers have been able to use their Epic and Instinct deployment plan expanded has done, and we support that growth We have ensured more supplies to do so.

We now expect the server to be up and running in 2027. Revenues will double in a year and data centers AI revenue 90 days ago we did Faster growth than forecast You will get it.

As a result, we expect that in 2027 Data accounts for over 80% of our total revenue. will come from the center and this is our revenue And will drive the bulk of revenue growth.

Looking further into the future, Customer engagement is very important for MI500. It is progressing well. The interest is high, because it is in performance. Another significant progress.

We are multiple. Working very closely with leading labs We are using MI500 for their workloads. to optimize, because they are multi- Planning for gigawatt deployment .

Turning clients and gaming segments Revenue down 8% year-on-year to 3.7 billion Standing.

The power of our Ryzen mobile processors Revenue from clients as a result of sales last year 2.9 billion, up 7% from the previous year Arrived. Commercial sector Our client businesses Becoming a larger part, because the bigger the Organizations among their employees Rising Pro is taking over PC.

Among the 10 largest banks in the world The eight and ten largest healthcare and Seven of the automotive companies are now Using Ryzen Pro PC.

OEMs are expanding their AMD-based commercial The lineup is designed to be more than just a simple business PC. From high-end workstations to It is expanding. HP, Lenovo and Others are our newest Ryzen AI Max Pro 400 series processor The first commercial notebook and small size Desktop launched.

These systems are workstation-class. Provides performance and locally Super with up to 300 billion parameters Can run intelligence models. Looking at the market, PC sales decline at the end of the quarter went, because of the memory and parts High prices put pressure on demand .

We are conducting business accordingly. , Customer and Channel Inventory Sell-in and sell-through to keep healthy I am coordinating between these.

In 2027, we drive the PC market unit It will decrease by a double-digit percentage. Planning. In this situation, we are growing our Roadmap implementation and commercial scope Surpassing the market through expansion I hope to go.

In the gaming sector, revenue is up 40% compared to last year. decreased to 773 million, mainly due to The reason is that at this stage of the console cycle, the semi- Custom sales are expected to be lower.

Gaming graphics revenue last year Compared to the previous year, however, the Radeon GPU channel Sales have gradually increased.

Gaming Outside, Radeon AI Pro revenue is up from the previous Significantly compared to the quarter Increased, because more customers Run the model locally and fine-tune AMD is choosing to make adjustments.

We hope to get the best value for every dollar we spend. Performance and the latest open source Optimized for open models Radeon AI Pro due to software Strong growth will continue.

In the case of our embedded segment, Revenue increased by 29% compared to last year to 1.1 billion, which is the fourth consecutive Incremental growth in the quarter.

Our Demand is high in all end markets. was strong, led by Aerospace & Defense, Automotive, Communications and Industrial Strong feedback from customers Growth. Data center construction also includes control planes and Optical networking Our embedded CPUs in applications and the need for adaptive SOCs Increasing.

We will design more than 18 billion in 2026. We are on the way to completing the win, which is our Third consecutive record year. Since the acquisition of Xylink Adaptive Design Wins Increase Every Year and embedded x86 and semi-custom Win is growing even faster.

This trend will continue for the next few years.

As such, we hope that our embedded Business strong double-digit annual growth will achieve revenue growth and drive the market Will exceed. In short, we are a wonderful third Completed the quarter and more Strong fourth quarter expectations I am doing this because data centers and embedded Segment growth Client CPU sales shortfall Will repay.

We are our history. The strongest product portfolio and With significant subscriber momentum in 2027 Entering. To support our growth next year Required wafers, substrates, Advanced packaging, memory and To protect other key elements, we We worked throughout our supply chain.

Based on our current forecast, We now expect revenue to grow by 80% in 2027. will increase more than last November On our Financial Analyst Day The long-term financial model described More than double.

Expansion of Helios deployment and Data due to share gate continuity The center will be the biggest contributor. We also hope that our adaptive And as a result of the adoption of X86 solutions Embedded growth to increase further next year Will accelerate.

After 2027, we will be able to use our silicon, Across Software and Systems Roadmap Research and Development (R&D) Investment and for the next 3 to 5 years Our largest customers are ambitious

Overall, these issues will be addressed in the coming years. Maintaining extraordinary revenue and increasing income On the ability to scale up quickly Gives us strong confidence.

Dev. We had an extraordinary third quarter. We have achieved, where our revenue has been With a 45% increase year-on-year reached a record 13.4 billion, which is our Exceeding the maximum limit of the directive Gone.

Its main driving force was our The center segment, which compared to last year, It has almost doubled. Data center and Strong growth in the embedded segment Revenue due to 16% increase compared to the previous quarter % growth, which is driven by client and gaming Partly due to the decline of the segment It has subsided.

Our data center segment totals It contributed about 64% of the revenue, which was More than 58% of the quarter. It's ongoing in our business mix. Changes and its impact on AMD's growth Highlighting the growing contribution.

Gross margin was 56%, up from last year. 190 basis points higher than the A reflection of a better product. Operating expenses were 3.66 billion, which is 29% more than last year.

Since we Our data centers, silicon systems and To expand software capabilities Continued investment in research and development So operating income is higher than last year. 75% increase to record 3.9 billion reached, which increased our revenue Significantly exceeded.

Operating The margin was 29%, up 5% from last year. expanded by more than a percentage point and This is as our business expands. Management highlights leverage.

In the third quarter, we launched the MI450 series Issued upon delivery of GPU Warrant and our previously announced customers Begin to consider the computational implications of the contract.

I did. Our gap is diluted earnings per share. was $146, including other income and A non-recurring expense of $1.1 billion -Cash charges were included. This is basically an increase in our share price. and to fulfill the terms of the warrant in the future Reflecting changes in estimated probability Does.

Under this agreement, we and our As customers progress, this quarterly non- Cash Fair Value Adjustment as It is expected to increase. AMD's stock price and other valuations Based on the assumptions, each These months will change quarterly.

This Non-cash adjustments are our non- GAAP results or free cash flow Don't.

Our non-GAP diluted earnings per share It was $29. Now our reportable segment, That is, looking at the data center Let's go. The data center segment had revenue of A record $8.5 billion, which is the highest since last year. 97% more than before.

The main driving force behind this was our fifth Powerful 8th generation Epic processor Record server revenue due to demand and Consistently our AMD Instinct MI450 Record data by launching a series of GPUs Center AI Revenue.

Data center revenue grew 27% , the main reason for which is the MI450 series Initial sales and server revenue Strong growth.

The data center segment had operating income of 2.9 billion, which is 168% more than last year higher and operating margin was 25% higher than a year ago % to 34%, which is data center Strong operational leverage of the business Shows.

In the gaming segment, client revenue was 3.7 billion, which is 8% less than last year. This is because semi-custom and Low sales of graphics, which is the latest The high-end of the generation Ryzen mobile processor Partially met by demand.

Client Business, Ryzen Mobile Revenue due to high sales of processors was 2.9 billion, up 7% from last year. More. Sequentially, the client's revenue is 4%. Decreased because of high memory prices PC has affected the demand for units, which By an advanced blend of high-end processors Partially fulfilled.

Gaming revenue was $773 million, up from $773 million last year. 40% less than last year. The reason for this is that semi- Customer revenue and graphics are low Demand. Gaming revenue in order mainly remained unchanged.

Client Gaming Segment Operating Income was 573 million or 15% of revenue, which is a 867 million or 21% less than the year before . Embedded segment revenue was 1.1 billion, which is 29% more than last year and 14% more than the previous quarter.

The reason for this is aerospace and defense, Automotive, Communication and Industrial As a result of the growth of the end market, various Demand in the end market has increased.

Embedded segment operating income was 453 million or 41% of revenue, which is a year ago 283 million or 33% more than.

Now for the balance sheet and cash flow. Let's get to the point. This quarter, we To meet the strong demands of data centers Inventory compared to the previous quarter An increase of almost 3 billion to 11.5 It stands at billions.

We are running. From the operational activities of the program 1.2 I made billions in cash. Free cash flow was 554 million, which Our data center business is fast Tools and capabilities for growth Increased working capital to secure Investment and ongoing capital expenditure Reflects.

Among these, our data center needs Dedicated backend capabilities to meet Included.

Our strong growth in 2027 We have the resources and capacity to support I hope to continue investing. At the end of the quarter, cash equivalent assets and The amount of short-term investment was 15.8 Billion.

Our total debt was 7.1 billion, of which was completed in August Senior note offering of Rs 4.75 billion Included.

Now let's come to our fourth year of 2026. Towards the quarterly forecast. We expect revenue to be around 17 billion. will be, which could be 3% more or less. The midpoint of our guidance About 66% compared to the previous year Represents revenue growth, which Essentially our data center segment Driven by rapid progress.

Sequentially, we are approximately 27% of revenue I hope it will increase. This is because our data center With a sharp growth of almost 50% in the segment, our 20% in the client and gaming segments More reductions and in our embedded segment Double-digit growth.

In addition, we expect to see a significant increase in revenue in the fourth quarter. Non-gap gross margin will be around 55%. And we expect non-gap operating expenses It will be about 3.75 billion.

We expect that non-gap net interest and Other expenses will again be around 4 million. . We expect our non-GAAP to be effective. The tax rate will be 13%. and diluted share account is approximately Expected to be 1.67 billion shares being, of which in the fourth quarter Tailless and World Labs acquisition Includes estimated impact of completion There is.

We are not expecting our fourth Quarterly Share Number Customers Will be affected by the warrant. Finally, the third quarter was a good one for AMD. It was an extraordinary quarter, where Record amount of revenue, significant Operating margin expansion and revenue There has been growth, which has spread across the business Reflects disciplined work performance.

Our data center business scope As we continue to grow, we are expanding Profit and long-term shareholders Very well prepared to achieve value .

Hello, good evening and my question is Thanks for taking it. Um, this is nice. Congratulations on the results. Lisa, let's do this. Let's start with the fact that you are in 2027.

Some more detailed information about the year Giving. It seems like revenue has increased by 80%. but its data center part is more Growing rapidly. Where next year More than 80% of your business is in a data center.

Will come from. So what are you going to say first? Can you tell me if it is supported by the supply, It is a wafer, packaging, substrate. , memory whatever? And then if You see the demand picture behind it, What if you were able to get more? Will demand exceed supply? Thank you.

Yes of course Tom, thanks for the question. Look, we're in the fourth quarter and 2027. I'm making good progress so far this year. We I see a situation where demand Very strong.

We are our data center. Business, CPU business and data center AI Business—Seeing Demand in All Areas I get it. And if you consider this growth rate and speed Look, we've been working on this for the past several years.

I am planning. So we Our customers with their deployment and deployment schedule requirements To plan and manage our supply chain Wafers, substrates, with partners, With advanced packaging, memory and All other necessary ingredients I spent a lot of time making sure.

It is true that demand is greater than supply. . So we are working hard to increase supply. Works with supply chain partners I have gone, and I believe that the whole The strong ties we have across the ecosystem Considering that there is a relationship, this should be done We have a good opportunity.

But From where we are sitting today, it It is very important to be able to say that, Overall company growth of 80% Will be more, especially the server business in 2026 From a fairly high level by the year will nearly double and data center AI Business will also increase.

We have a strong There is visibility and we are Strong demand from customers I see. Also, necessary We are also involved in all other aspects of infrastructure. I see good progress.

So, Overall, we expect data until 2027. Very positive about the growth of the center.

This Very helpful. And then the client As a follow-up on the side, , fell more than 20% in the fourth quarter has been achieved, which is still unmatched by others on the market Quite in line with what we've heard from Compatible.

But if you are 27 years old Look at me, I think it's a difficult subject. is that you usually have a baby in the first trimester ( Q1) See seasonal decline and then Second or third quarter (Q2 or Q3) ) do not see any recovery before.

So, how sustainable is this price decline? Maybe, why are you doing so well so far? have been able to bear fruit and this recession will end next year How do you deal with the issue of getting out of You see, tell me something about that. Thank you, Lisa.

Yes, of course, Tom. So the PC market Let's talk a little about it. PC market An important market for us. I think we've been talking about this for the last few calls. I was indicating that we were going to A sub-seasonal situation in the second half I hope so and in reality that is what happened.

Our The view is that this is a time when If the price of parts increases, it will affect the overall Affects the price of the system. Naturally, consumer markets are will be more sensitive to and so we I have seen a slight slowdown in sales.

We conduct business very prudently. I am doing it. We want to make sure that our Inventory should be available to channels and customers There is enough. So in 2027 Our plan is to have two markets The percentage of the figure will be downward.

We I will definitely focus on those segments. Where we can add the most value I can. Places like Enterprise, Where premium consumer desktops We are underrepresented on the channel.

These A really good market for us. But In keeping with the current situation, we 2027 as a recession year We are planning and we are going through this. I will go to work. The good thing about this is that our supply chain Our PC business and data center Quite flexible throughout the business.

And so, with these signals in the market We also have the opportunity to transfer supplies. I get it. And overall, as I said before , we have more demand than supply, and So we Supply over the next few quarters Works in all aspects to increase I'm going.

Thank you for taking my questions. Lisa, you know, the data center Financing and land, electricity and shale etc. There is a lot of debate in the market about availability. . So it is basically divided into two parts.

AMD- What is the level of confidence that, Financing and physical delivery to your customers There is infrastructure with which they can support Can you? I think AMD in 2027 The planned installation is about 3 gigawatts or It will be close to him.

And then, if we I see outside, you have many competitors. Investing in the ecosystem, the rest Price guarantees and similar benefits and says that their products The interchangeability is very high.

So, what is it? A kind of competitive advantage for AMD Creates the situation? So, in 2027 Preparation and competitive situation I would like to know your views on Interested.

Of course, VC. Thanks for the question. I As I said before, we are our main Very popular with data center customers I see strong demand. In my mind Either way, you can see that more A strong demand for computing and MI 455 is very well Staying.

When we were in Venice, MI 455, Looking at Helios, I think we Very concerned about its competitiveness Optimistic. We are with our customers. Together, they plan to increase this production.

Coming. So we have a plan until 2027. Good idea, as you said, Land, power, shell, all this data Regarding the center's infrastructure. And we work hand in hand with our customers.

Working together, so we know Which data center are the GPUs in and which Going into position and all these things. 2028 In the year and beyond, what I will say is It is as follows.

Look, I think we Very strong growth overall I see. I think we have one. There is a very strong business. One of us

As I said before, we are our main Very popular with data center customers I see strong demand. In my mind Either way, you can see that more Strong demand for computing and MI 455 is very well Staying.

2028 In the year and beyond, what I will say is It is as follows. Look, I think we Very strong growth overall I see. I think we have one. There is a very strong business. One of us It has a very strong balance sheet.

And that From our perspective, first and foremost The goal is to support this, Investing in our growth. and its It means research and development (R&D). Investing in supply chain and capacity Invest.

With our partners Investing together, so that we can discuss it first For such rapid expansion to be made Ensuring the availability of everything necessary I can do it.

And then we will contact our main partners I am investing selectively with, where We are seeing that data center infrastructure A long time ago, that is, several years ago It is helpful to keep track.

And I think that's the right thing to do, so that As our new chips become available Together we ensure the right infrastructure I can do it.

But how do we do this? We are being selective and strategic about the issue, The first principle of which is that in our growth Invest. You know, your frontier. Many of the lab's customers have their own custom Working on A6.

And I'm curious to know. , they conceptually compare A6 vs AMD Deciding between using the product? For example , based on what they allocate them Determine? Is this the cost per token, Power saving, software flexibility, Time, or installation time?

This is the decision Key considerations in adoption What? And is there even a workload? Where AMD GPUs are used Does it work better than the alternatives?

Of course, VC. So, look, I think The performance we get through Helios And I'm paying total cost of ownership, The position we are in in terms of We are very satisfied with it.

In the future, when we deploy on a large scale, When I think about it, this is the most important thing. Subject. I think we are on a rack scale system. I made a significant investment and it I made sure Helios worked properly. Can do.

You know, the third The quarter was the first quarter in which We are MI455 Helios Rack for Revenue I have provided. I think this is a Very important milestone. Fourth We took a big step forward in the quarter.

And its momentum will continue to increase throughout 2027.

And the main thing for us is the variety TCO (Total Cost of) in terms of workload Demonstrates the advantage of Ownership Go.

It is true that a typical GPU- From its perspective, various types We have more in terms of workload. There is fungibility. In addition, its code design is also very strong. So, beyond the MI450 series, we also have the MI500 And we are also working on the MI600, so that we can Technology With the needs of frontier labs It is more consistent.

So I think Do, make deployment decisions These are the main points in the case. Hey friends, I'm sorry to hear about your question. Thank you for your support and for your progress.

Congratulations. I was thinking, instinct. As the business expanded, HBM ) How does cost affect your model? Do you have any questions for us about what is being done? Can you give me an idea?

I think so. Investors want to know that HBM Current status of pricing Considering the past year or more Assuming you have a gigawatt of revenue per gigawatt How to predict 15 to 20 billion There is so much stability in the dollar.

What is the reason for this? Here are the initial constructions Essentially program-specific and very expensive Was it already determined? Again, we When I think about this business in the long term , then the question arises, this increased production The costs are even your top three.

Is there any power to impose it on the customer? Do you have any?

Of course, Josh. So, think of it this way. It may be that when we do our activities Expanding, then we have something With suppliers and customers There is a long-term contract.

But Current situation of the memory market Considering, and only the memory market No, at the expense of other components too Inflationary pressures are emerging, because More in the overall supply chain environment Capital expenditure (capex) is being made.

We are also working with our customers. So that these costs can be shared in the future. It can be confirmed.

So, my perspective So, back to the question asked by the VC, this The whole thing is TCO (Total Cost of Ownership) and tokens per dollar From a perspective, it is important to ensure that we AMD Instinct and our overall Helio Very important to choose the system We continue to provide powerful benefits.

And despite some inflationary pressures , we certainly believe that we are AI Offering the best TCO for workloads . Thank you, Lisa. So maybe for the genes, Operations in the third and fourth quarters It was good to see OPEX coming down.

It has been a while for investors There was a concern, you know. But I think revenue growth in 2027 At the rate it is expected to increase, We are walking in a bit of darkness because you More than double your target Spending.

Operating expenses in 2027 How should we think about growth? ? And since this is what we're talking about, you What do you think about Helios' production throughout the year? As you grow, you will Target gross profit rate (gross margin) i.e. that 55% minimum limit Can you keep it?

Yes, Josh, the question about operating expenses Thank you for. As you said. , we have been investing aggressively. What we are seeing is that these investments To accelerate revenue growth Helping.

We are quite optimistic about the operating costs for 2026. Satisfied. We are more concerned about the growth of operating expenses than We are increasing revenue at a very rapid pace, which Driving force for increasing operating profit rate Working as.

And, if you are the fourth Thinking about the quarterly (Q4) forecast, We are much more than operational expenses (OPEX). We are seeing more significant revenue growth. . We believe that this trend will continue until 2027. Will continue until.

Speaking of this , we are expecting that the entire company will be 80% Will achieve more growth. We should expect that operating costs ( opex) than the total revenue growth rate will increase less, i.e. total revenue growth Less than half the rate.

So, it's 2027. Operating profit margin in will cause a significant expansion.

Total Let's get back to the topic of profit (gross margin). , we are the current status of our gross profit Really very happy with it.

In the third trimester (Q3), we are increasing production of MI450. Data center AI business is very good is doing, even entering the third quarter The weather is better than we expected.

and In the fourth quarter (Q4), we Consistently 50% for center business I am predicting revenue growth. In fact, this quarter is the first quarter of data center AI The business will surpass the server business.

So, we all know that the corporate average Although the margin is slightly lower in comparison, Gross margin increased significantly Growing. I think, looking towards 2027, We actually think that our data center Business accounts for 80% of the company's total revenue. It will be more.

So this mix of data center business The company's gross margin has increased significantly. Will drive. The matter can be thought of this way: 2027 The spread of data center AI until 2020 will continue and server business will double It is expected to be.

So there may be variations on a quarterly basis. Maybe, because the mix of these businesses It will be a little different. In addition, in-bed business will increase further in 2027.

Getting stronger. I think when you Unify the entire business model, Then this is our overall gross margin. It will also help to increase.

What we should expect from you is: Significant topline revenue growth, Significant gross profit expansion and Operating expenses (compared to revenue growth) OPEX) increase, resulting in operating margins And profits will increase significantly.

Um Lisa, I'm wondering if you're a little... You can break it down and say that next year's data What will the condition of the center be like? Um, you From 70% for server CPUs It has increased by more than 100%.

But You are very knowledgeable about data center AI. Doesn't say anything too specific. Then Is the correct way to think of it as the dollar? As GPU business server The CPU will be bigger than the business, but very Not much?

Is this the right way to think about this division? Way? And then, how is the situation this year? How can you imagine that? I know that The GPU business is performing unevenly, but I think there's a pretty big difference between this and the rest of the year.

There will be changes of sorts. Is it right to think that?

Yes, Tim. Well, I have a few things. I'm breaking it. So look, first of all, we remember I believe that by 2027, the CPU business and data Center AI is a business for both To be a year of very strong momentum It's going.

And you know, when we I gave you some pointers, You should only use them as a guide. Should be considered, right? So we said. That the overall company growth is 80% It will be more than. and data center CPU In business, it will be almost double.

And in the data center AI business, This is significantly more than double. It will be more.

And from that perspective, You should expect data center AI The business will continue...as Jean just said. He said, the fourth quarter (Q4) is the first Quarterly where data center AI The business is larger than the CPU business in terms of size. Will exceed.

And we hope that both Business will grow nicely throughout the year. . So I hope this helps you throughout the year. It will give you some ideas along the way.

Thank you very much. And then, Gan, I remember Can you tell us about the warrants? Can you help? They are year-round. How to join? This issue is discussed throughout the year. And how does our model work out until 2027?

You can ask about whether it can be included. Do we have any kind of security measures? Can you give?

Yes. Thanks for the question. In my mind Well, the easiest way to think about it is, The warrant has three parts. The first one That is, we are net revenue, i.e. Q3 and Q4- We report its revenue and whenever we When we talk about revenue, it is always net.

Revenue is, of which warrant revenue The reduction part is already included. , which is the fair value at the final date It is determined. So, with this you No need to worry. Whenever we are in revenue Let's talk about it, it's always ours Included in revenue.

The second part, which you probably already know What you want is the number of shares. The matter can be thought of as follows: The number comes in diluted shares only when All vetting conditions by our customers and the exercising condition is met.

This means that there must be shipments and some Commercial conditions must be met. We will give you a clear vision in 2027. We will give instructions when we feel that Conditions for share vetting and excising Fulfilled. By 2027, it will provide a transparent Will do.

The last thing is, this is a non-cash charge. , which is a rematch of fair value And this is our non-GAAP financial results and Does not affect free cash flow.

So, regarding share accounts, we When we reach that point, I will tell you. Waiting for clear instructions Do it.

Yes, good afternoon. To accept the question Thank you. I think, first The question is about the server CPU. You have made your views more clear. He has taken it high. I am interested to know that. , with higher core count and vetis Unit vs Mix with added higher ASP How should we think about it?

Okay , this 100% growth is important for us to understand Break it down to help. Is there any way to explain?

Of course, CJ. So the server TPU- In this case, when we talk about 100% growth I'm saying, then you should assume that We are definitely significantly more We are supplying units.

In this case, when we talk about 100% growth I'm saying, then you should assume that We are definitely significantly more We are supplying units. Of course, in Venice. As soon as those units leave Some also have more cores.

But I I would say that revenue growth is mainly due to unit and Due to the number of cores, the average sales Not so much because of the price (ASP), though. As the number of cores increases, the average There has also been a slight increase in the selling price. Going.

Excellent. Thank you. And I think, As a next question, the first quarter (Q1) The seasonal effect is a little clearer. I'm telling you to do what you said tonight. Based on what I understand, That is, in the first quarter after December (Q1 ) Our clients and gaming Seasonally normal decline in cases Should, especially for rateable data centers In case.

And I think, as part of that, , embedded business for embedded topic Do you have any idea how to think? Do you have a plan? It usually has a seasonal effect. We are looking at 2027 as a whole year.

Looking at it, I can see that it is embedded. Business will increase significantly and throughout the year Will be stronger. But usually first In terms of embedded business in the quarter (Q1) There is a slight seasonal trend.

Hi friends, I'm taking questions. Thank you. I was thinking, I know you said that. In the context of that 50% guide, the fourth GPU vs. CPU in the quarter (Q4) There will be changes in.

I thought you were What about the magnitude of that change for us? Can you help? Is this too little? Or significantly more? I just In terms of entry rates next year I'm trying to understand its size.

Yes. Hi Stacey. Well, maybe I am. I can give you some ideas, right? The thing can be thought of this way: if you Think about the growth of MI450, then you will see It has been a consistent one from Q3 to Q4.

Very important progress. And honestly, compared to the server side, The server is quite good and strong. Growing. But, The rise of data center AI, which in Q4 has surpassed the server, that is a Very important progress.

In my mind Either, The server business is quite expensive in terms of cost. Strong, but in dollar terms in Q4 Data Center AI Server Business It will be much more.

Yes, in dollars. Yes. Okay. Excellent. And thank you. And mine For follow-up, Gene, next year's gross There were some questions earlier about margins. I I wasn't exactly sure what your answer was. How do I explain, especially in the future?

For follow-up, Gene, next year's gross There were some questions earlier about margins. I I wasn't exactly sure what your answer was. How do I explain, especially in the future?

In terms of gross margin for the year, probably Q4. Compared to the rate of. Are you our 2027? A good year for gross margin Entry rate and a good exit rate Can you shed some light on this?

Increasing the production of various products and whatever Considering what is happening.

We provide you with information on a quarterly basis. I can't give it to you because when you When thinking about the mix of data centers, You will see that this will be the main thing in 2027.

Driving force. When the data center business is transformed from a company More than 80% of the total business revenue comes from The interesting thing about data centers is, Data Center AI Business will continue to increase significantly.

Server We are on the side. I mentioned that in 2027 we I will double. Of course, we supply I also know about the environment of constraints and Lisa also mentioned that we provide more with our suppliers to confirm Working.

So, it's actually a mix of these two businesses. Determines that the company's gross margin What will happen? It's clear to me at this moment No idea. I think we hope so. Both businesses will do very well and we know That will do both very well.

The fourth quarter (Q4) is actually considered A good criterion for, because the fourth Data Center AI in the Quarter Business CPU is much more than business More. So I think this criterion gives you a It has given the idea, but it will be different in 2027.

It may be quarterly, there may be variations. Can.

Excellent. Thank you. We are the Helen racks. Several positive reactions about I heard. And I want to know if you Only about the CPU version He would say something. A conventional rack This type of agentic in comparison What is the difference for workloads?

And then you are in many of these GPU blade attach rate expected to increase Are you doing?

Of course, Joe. Yes, Helen racks. There is a lot of positive excitement around and I I think the main point of this is that this agentic The racks. They are responsible for the environment they are in.

Really wants to optimize. So if they Hyperscale or large cloud racks , then there are all kinds of CPUs The configuration will be there and the rack is quite dense. Will be. From a performance per socket perspective The best in the Venice industry.

And so, if you put it in the CPU If you fill it completely, then it is a very It will become a powerful agency rack. But the enterprise In areas where you can use CPU and GPU You will also have the opportunity to mix together and this users for their workloads Helps to optimize.

And we have converted to OCP, so This is a completely open rack and I I think of this as a positive aspect. See you later. And from that perspective, we are OEM, ODM and Very positive from both customers I got a response.

Okay. Thank you. And if I go to the server I want to know about that 100% growth, Do you think you are at that level? Can you meet the demand, or will it be next year? You have a kind of shortage situation throughout. Will there be?

Well, Joe, the amount of growth we have has been done, we have been able to meet a lot of demand I can, and you know, when we TAM ( Total Addressable Market) is expected to grow I said, let's say, in the next three or four years About 50%, then we have three cases We saw growth, right?

For example, Traditional Cloud and Enterprise, Agentic CPU and Agentic Workload And the head node. We believe that we are Increasing our share in every category, As we have shown you almost 100% I predicted.

I truly believe that more demand and we are meeting the additional demand With our supply chain partners I am actively working. You know, Obviously, we also need to make sure that The squared set, DDR5 and others All the ingredients should be there.

But in my opinion, Demand from our customers We are a big player in forecasting. Taking action. I am excited about the fact that we Demand is widespread. That is, their activities with AMD It is practically inefficient in terms of increasing the range.

It is within every customer and it A positive aspect. And we are extra The task of increasing supply to meet demand I will continue, whenever it becomes a reality.

Yes. Hey Lisa. The question is about Helios. . You are one of two companies that Providing complete racks. What am I? About your desire to share Can I ask? And I ask this question.

I'm doing this because you are in the server case. Did a great job and is basically a very Market share from a tough competitor They took it away. And the second part of the question Part of this Helios rack and setup Entering the enterprise market through Do you have any aspirations? and I have a follow-up question.

Harsh. So look, we are with Helios. We are very happy with the progress we have made. I I think this is an important rack. Scale Solution and what's behind it Significant research and development (R&D) Effort.

I think Helios is very Accelerated nicely. We are third. A very good start to the quarter (Q3) I saw. We are in a beautiful fourth quarter. (Q4) and moving towards 2027. Our desire is our greatest Customers, i.e. Frontier Labs and To both hyperscalar, a very To be a major compute supplier.

And from that perspective, the fourth quarter And for 2027, Helios MI450 The issue of increasing production is very important to us. There is more. But we are our best. With large customers, MI500, MI600 and so on Very excited about the next versions.

We are actively discussing. And our Desire is A growing number of their computing needs Filling a large part and what we see, The demand is constantly increasing. So mine I think that's all we know about Helios.

Overall view. What is the other side of the question? Was there any part? Enterprise. Oh Enterprise, Enterprise. Yes, of course. Yes, without a doubt. I think we can see that, although The enterprise sector is the largest Frontier Labs and Hyperscalers Developing at a somewhat slower pace than We believe that enterprise business Quite important.

We In terms of enterprise CPUs, many I have made progress. Many of our enterprises The customer is actually asking us for advice. That is, how to deploy AI and Both on-prem and cloud In order to do this most efficiently, How to ensure that it can be installed Goes.

So, we are expanding our portfolio. Expanding. We are some enterprise- I have enabled the specific GPU and This will be a place where we We want to grow our footprint so that we Our largest enterprise customers Once again a very strategic I can be a supplier.

Got it. And my next question is for the customer. For the party. You know, historically You are in a situation like this, Did a great job in directing. . If your main competitor is average If the selling price (ASP) is reduced, then What will be your strategy for preserving shares?

Are you going to compete with them? Will you try or not? Will you make decisions according to the situation? How will you manage it? I'm curious about it.

Yes, Harsh, I think. Either our view is that PC is our An important market for, especially From this perspective, I am end-to-end In AI deployment (i.e. from cloud to edge) (up to the client) firmly Believer.

And, in this case we have a Has a unique portfolio. Since the matter So, I think we are Always good in management Stay disciplined. Our focus is mainly The highest priced PC on the market and The most profitable parts were: Enterprise, Premium Consumer, Desktop, channel.

In these places we I do very well. We acknowledge that the market is low. There is quite a bit of instability at the level and to be honest , our risk is highest in that part of the market Less.