(Reuters) -Advanced Micro Devices forecast fourth-quarter revenue above market estimates on Tuesday, betting on the multibillion-dollar expansions of data center infrastructure to boost demand for its
artificial intelligence chips.
The company expects revenue of about $9.6 billion for the quarter, plus or minus $300 million, compared with analysts' average estimate of $9.15 billion, according to data compiled by LSEG.
AMD has been the recipient of many significant investments in AI hardware alongside partners ranging from ChatGPT parent OpenAI to the U.S. Department of Energy, with Wall Street betting heavily on the potential of relentless spending on advanced processors.
The company's shares rose 1.5% in choppy extended trading.
AMD reported third-quarter sales of $9.25 billion, compared with analysts' average estimate of $8.74 billion.
Its shares have more than doubled in value in this year, with AMD's stock gains outpacing those of market leader Nvidia, even as the larger rival's market valuation scaled the $5 trillion mark.
Fears of an AI bubble have lately rippled through Wall Street and AMD's results are being closely watched.
AMD last month said it would supply AI chips to OpenAI in a multi-year deal that would bring in tens of billions of dollars in annual revenue and give the startup the option to buy up to roughly 10% of the chipmaker.
The deal covers the deployment of hundreds of thousands of AMD's graphics processing units (GPUs), roughly equivalent to the energy needs of 5 million U.S. households, or about thrice the amount of power produced by the Hoover Dam.
This has raised optimism around AMD's position in the unrelenting race to build the fastest, most widely adopted AI chips.
However, Nvidia's dominance of the lucrative GPU industry and its dominant share of this market are still largely secure, analysts say, even as AMD competes for a bigger piece of the AI chip pie.
(Reporting by Max A. Cherney in San Francisco and Arsheeya Bajwa in New Delhi; Editing by Sriraj Kalluvila and Matthew Lewis)
