CNBC Television
AMD delivers Q3 beat and raise
11/5/2025, 5:09:25 PM
Economic Summary
- AMD reported a solid earnings beat and guided to ~25% revenue growth in Q4, but guidance fell short of aggressive 'whisper' expectations, leaving stock action muted.
- Despite high-profile AI partnerships (OpenAI, Oracle, U.S. DOE), AMD says material AI revenue contribution likely won't arrive until around 2027, delaying near-term revenue impact.
- Legacy PC chip sales are currently carrying AMD's results — PC revenue growth was more than triple AMD's data center growth, highlighting limited current AI revenue.
- Gross margins for AMD were flat (in line) across Q3 and Q4, prompting questions about how profitable the upcoming AI business will be when revenues materialize.
- OpenAI reported strong enterprise traction — roughly 1 million business customers and ChatGPT Enterprise growing quickly (paid seats up from 5M to 7M) — but also disclosed large cash burn in recent quarters.
Bullish
- AMD beat estimates and guided to about 25% revenue growth for Q4.
- Partnerships with OpenAI, Oracle, and the DOE could scale AMD's AI revenue to tens of billions by 2027.
- OpenAI enterprise metrics — 1 million business customers and rapid paid-seat growth — show strong demand.
- NVIDIA's leadership validates strong market demand for AI compute, benefiting chip ecosystem players.
Bearish
- AI revenue payoff pushed out to 2027, limiting near-term upside for AI-focused investments.
- Gross margins were merely in line, raising doubts about the profitability of future AI products.
- AMD's deal to give OpenAI roughly 10% equity concerned investors about the economics of the deal.
- OpenAI's reported multibillion-dollar cash burn threatens near-term monetization and sustainability.
- NVIDIA's clear lead in AI chips leaves AMD chasing market share and differentiation.
Bullish tickers
AMDORCLOPENAINVDAMSFTWMTCRM
Bearish tickers
AMDOPENAINVDAMSFT
AMD
Bullish
Beat across the board with ~25% Q4 revenue guidance and major partnerships (OpenAI, Oracle, DOE) that management says could scale AI revenue materially over time.
Bearish
AI revenue payoff delayed to 2027, margins only in line, China exports absent, and the OpenAI equity deal raised investor concerns.
OPENAI
Bullish
Strong enterprise adoption (1M business customers, rapid paid-seat growth) and major commercial partnerships point to significant future revenue potential.
Bearish
Reported multibillion-dollar quarterly losses and high cash burn create sustainability and monetization concerns.
ORCL
Bullish
Partnering with AMD on AI initiatives could expand Oracle's role in enterprise AI infrastructure and cloud deployments.
Bearish
Benefits depend on execution and timing of partner deployments; near-term revenue impact is uncertain.
QCOM
Bullish
Quarterly results (reporting after the bell) may provide clarity and potential upside if AI demand shows through.
Bearish
Upcoming report could disappoint if AI-related traction isn't apparent.
NVDA
Bullish
Seen as the clear frontrunner in the AI chip race, benefiting from surging demand for AI compute.
Bearish
High expectations and a dominant position could leave little room for error or further upside.
MSFT
Bullish
Deep involvement with OpenAI and AI initiatives positions Microsoft to benefit from enterprise AI adoption.
Bearish
Exposure to OpenAI raises concerns because of OpenAI's large cash burn and uncertain near-term monetization.
WMT
Bullish
Named as an enterprise customer of OpenAI, indicating real-world adoption of AI tools by large retailers.
CRM
Bullish
Listed as an OpenAI customer, reflecting enterprise interest in integrating AI capabilities into software platforms.
People mentioned
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