AI Boom Fuels AMD’s Most Profitable Quarter, Despite 40% Drop in Gaming Revenue
AMD’s third quarter has become the company’s most profitable yet, driven primarily by artificial intelligence demand, despite significant declines in its gaming business. Gaming revenue fell 40 percent year-on-year, with the drop largely attributed to declining “semi-custom” sales from console and handheld manufacturers.
During the company’s Q3 earnings call, CEO Lisa Su highlighted the AI-driven growth while acknowledging headwinds for traditional gaming platforms. She anticipates that the PC market will continue its decline into 2027, with forecasts predicting double-digit percentage reductions in total computers shipped.
Despite the gaming revenue decline, Su expressed confidence in AMD’s competitive position, stating the company expects to “outperform the market” with new Ryzen chips launching in 2027. The shift reflects a fundamental pivot in the semiconductor industry, where AI computing infrastructure has become a more valuable market than consumer gaming hardware.