- 3Q26 revenue and adj. PATMI were within our expectations. 9M26 revenue/adj. PATMI were at 70%/75% of our FY26e forecasts. 3Q26 data centre revenue surged 97% YoY to US$8.5bn, driven by EPYC server CPU sales and volume shipments of MI455X.
- Client and Gaming segment declined 8% YoY to S$3.7bn. Demand slowed due to higher memory costs and lower semi-custom sales. Client revenue decelerated to 7% growth YoY to S$2.9bn (2Q26: +23% YoY) as high memory and component costs dampened PC sell-through. Nonetheless, AMD guides FY27e total revenue to grow more than 80% YoY, supported by Helios deployment, EPYC share gains and Embedded segment growth. We expect AMD’s data centre segment growth to offset client and gaming segment decline.
- We maintain BUY, TP unchanged at US$755. We raised our WACC by 10bps to 7.2% by raising risk-free rate assumptions due to higher expected interest rates. We raised our FY27e revenue/PATMI forecasts by 6%/12% respectively, as DC revenue is expected to double in FY27e and account for 83% of FY27e revenue (FY25: 54%). We expect DC operating margins to expand, driven by operating leverage from strong sales of EPYC CPUs and MI450 GPU. AMD trades at 55x FY26e P/E, within 1SD from its historical mean value of 60x.
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