Berliner Boersenzeitung - AMD Forecasts First-Ever Revenue Lead Over Intel on AI Chip Surge

Advanced Micro Devices has projected fourth-quarter 2026 revenues of approximately $17 billion, a forecast that would mark the first time in the company’s history that it generates more income than rival Intel in a single quarter. The milestone is primarily driven by explosive growth in its data center segment, fueled by unprecedented demand for artificial intelligence accelerators and next-generation server processors.

The guidance, delivered to investors alongside record third-quarter results, positions AMD to generate roughly $1.5 billion more in revenue than Intel during the October-to-December period, assuming both companies meet their respective estimates. This projection represents a significant acceleration of market expectations; as recently as April, consensus forecasts had AMD surpassing Intel’s top-line revenue in 2027.

In the third quarter of 2026, AMD reported revenue of $13.4 billion, a 45% increase from the previous year. This performance occurred even as Intel, which released its financial results one week prior, guided to a range of $15 billion to $16 billion for the same three-month period. Using the midpoint of both companies' estimates, AMD is effectively set to outpace its traditional competitor by a wide margin.

The primary engine behind this shift is AMD’s data center business. Revenue from this segment climbed 97% year-over-year to a record $8.5 billion, accounting for 64% of total sales, up from 47% a year earlier. The operating margin for the segment widened to 34%. This growth was supported by the initial revenue shipments of the Instinct MI455X accelerators and Helios racks, with major technology firms including Anthropic, Meta, Microsoft, OpenAI, and Oracle bringing their first systems online.

Additionally, AMD began revenue shipments of its 2nm Epyc "Venice" processors in the third quarter. While the full Venice stack is not scheduled to ship until 2027, the company indicated that further uplift is anticipated if demand remains on track.

For the fourth quarter, Chief Financial Officer Jean Hu guided for data center revenue to increase by approximately 50% sequentially, a figure Tom’s Hardware estimates at roughly $12.8 billion. She noted that Q4 will be the first quarter in which AMD’s data center AI business, comprising Instinct GPUs and racks, outsells its server CPUs by a wide margin. Conversely, client revenue is expected to fall more than 20%, gaming revenue is projected to decline by over 20%, and embedded revenue is expected to grow by double digits.

Intel’s financial outlook presents a complex baseline for comparison. Its guidance accounts for lost output resulting from an explosion at Fab 28 in Kiryat Gat, Israel, on October 14, which killed two workers and shut the plant for approximately two weeks. Intel CFO Dave Zinsner stated that the guidance includes an impact of roughly $300 million to revenue, almost all of it attributed to 10nm server products. Even when adding this figure back to the high end of Intel’s forecast, the total reaches $16.3 billion, which remains below AMD’s estimated floor.

The crossover has occurred ahead of Wall Street expectations. According to Futurum, analysts were looking for about $17.05 billion from Intel, while Opening Bell Daily reported estimates of around $16.2 billion for AMD. The discrepancy between the forecast and prior analyst consensus contributed to AMD’s stock surging more than 100% year-to-date, despite a recent steep selloff related to AI sector volatility.

Industry analysts emphasize that this revenue milestone does not necessarily reflect a shift in processor volume. According to Mercury Research figures reported by HotHardware, Intel still held 65.9% of the x86 processor market in the second quarter of 2026. Furthermore, AMD’s revenue includes businesses that Intel does not operate at a comparable scale, such as Xilinx-derived embedded chips and console silicon. The comparison is further skewed by the inclusion of Instinct accelerators, which are reaping AI-related bonuses at a scale Intel cannot currently match.

While AMD’s data center segment has previously outearned Intel’s equivalent group—first reported in the third quarter of 2024 when AMD’s $3.5 billion edged past Intel’s $3.3 billion—the recent explosion in revenue has created what appears to be an insurmountable short-term lead. In the third quarter of 2026, AMD’s data center revenue was $8.5 billion compared to $7.3 billion for Intel’s Data Center and AI group.

The shift owes more to a market transition toward accelerators and racks than to the central processing unit rivalry that historically defined the two companies. Intel’s own data center accelerator, the GPU D-series formerly codenamed Crescent Island, remains upcoming.

Intel CEO Lip-Bu Tan stated that the immediate priority is to "unlock additional supply to meet extraordinary demand for our Xeon family." Intel’s third-quarter revenue rose 21%, and its data center group grew 78%. Analysts caution against interpreting Intel’s forecast as an exodus of customers, noting that capacity constraints and a broader PC slump are affecting both firms. AMD has planned for PC unit shipments to fall by a double-digit percentage in 2027.

AMD CEO Lisa Su acknowledged production limitations, telling analysts that "demand is higher than supply." The fourth-quarter forecast relies on a rapid ramp of the Helios rack platform, which shipped for revenue for the first time last quarter. This expansion carries significant costs: inventory rose by approximately $3 billion to $11.5 billion, and free cash flow was reported at $554 million. AMD’s major AI deals also include customer warrants, which resulted in a $1.1 billion non-cash charge in the third quarter, a figure the company expects to grow.

Revenue concentration remains a factor, with sales heavily concentrated among a handful of frontier labs and hyperscalers, amid growing concerns regarding circular financing. AMD now expects data center sales to constitute more than 80% of revenue in 2027, with server CPU revenue doubling. Delivering on this projection depends on partners such as Hewlett Packard Enterprise, which became the first major OEM backer for Helios and announced that Vultr will deploy the first systems it builds.

If both companies land within their projected ranges, AMD will have outearned Intel for the first time. The underlying narrative highlights a structural shift in industry revenue toward accelerators and racks that now fill data centers, rather than a decisive knockout in the traditional CPU market.

(L.Kaufmann--BBZ)