AMD Warns of a PC Market Slump in 2027 While AI Revenue Surges 97%

AMD expects global PC shipments to decline by double digits in 2027 as rising memory and component prices weaken demand. Meanwhile, the company’s Data Center business continues to expand rapidly, with revenue jumping 97% year over year in Q3 2026.

AMD reported record Data Center revenue of $8.5 billion for the quarter, accounting for 64% of its total revenue of $13.4 billion. A year earlier, the segment represented 47% of AMD’s business.

AMD expects Data Center revenue to dominate in 2027

AMD CEO Lisa Su said customers have expanded their deployment plans for EPYC server processors and Instinct AI accelerators, prompting the company to secure additional manufacturing capacity.

AMD now expects server CPU revenue to double year over year in 2027, raising its previous forecast of more than 70% growth.

AMD expects Data Center revenue to grow approximately 50% sequentially in Q4 2026, with AI accelerator revenue surpassing server CPU revenue for the first time. The company also projects that Data Center revenue could account for more than 80% of its total revenue in 2027.

AMD is also increasing production of its Instinct MI450 accelerators and Helios rack-scale systems while continuing development of its next-generation MI500 accelerators.

AMD warns PC shipments could fall by double digits

Despite strong demand for AI hardware, Su acknowledged that PC sales slowed toward the end of Q3 2026.

Higher memory and component prices have started affecting demand, and AMD expects global PC shipments to decline by a double-digit percentage in 2027.

The forecast concerns the overall PC market rather than AMD’s processor shipments specifically.

AMD remains confident that its Ryzen processors and growing commercial PC business will help it outperform the broader market.

AMD gaming revenue drops 40% despite Client growth

AMD’s Client segment generated $2.9 billion in Q3 2026, representing a 7% increase year over year.

However, Gaming revenue declined 40% to $773 million, primarily because of lower semi-custom chip sales. AMD attributed the decline to the current stage of the console hardware cycle.

Microsoft has reported a similar slowdown, with Xbox hardware revenue falling 14%.

Meanwhile, Microsoft’s FY27 Q1 financial results showed strong cloud growth, with Azure revenue increasing 48%.

Intel has also highlighted the growing importance of AI infrastructure. Its CEO recently predicted that AI would become bigger than the internet, while warning about hardware shortages, financing challenges, and security risks.

Via VideoCardz