AMD's AI Counterattack: Helios Grows, CPU Business Gets Another Boost

AMD's AI counterattack is shifting from a single-point GPU breakthrough to comprehensive expansion of its data center business.

In its most recently released Q3 2026 financial report, AMD's data center business revenue reached $8.5 billion, a year-over-year increase of 97%, making it the core engine driving performance growth.

At the same time, the company’s AI accelerator platform MI455X Helios has started its delivery ramp-up phase, and server CPU demand continues to heat up. AMD expects that by 2027, overall company revenue will grow by more than 80%, with data center business accounting for over 80% of total revenue.

This growth blueprint has quickly drawn the attention of Wall Street. Citi has named AMD its top pick among large-cap growth computing chip stocks, setting a target price of $800; Goldman Sachs maintains a Buy rating, expecting data center operations to support more than 80% revenue growth by 2027. While JP Morgan also raised its earnings forecast and price target, it still maintains a Neutral rating.

AMD is trying to prove: its AI growth story is about more than just GPUs.

Helios Begins Ramp-up, AMD Accelerates Entry into AI Infrastructure

In Q3, AMD's revenue reached $13.4 billion, up 45% year-over-year; of this, data center revenue was $8.5 billion, up 97% and accounting for roughly 64% of total revenue. Non-GAAP EPS was $2.09, beating the market expectation of $1.95.

The growth of AMD's data center business has been jointly driven by its GPU and server CPU product lines. JP Morgan notes that AMD’s server CPU revenue grew more than 90% year-over-year in Q3 and about 20% quarter-over-quarter; data center GPU revenue also showed strong sequential growth, with analysts estimating an increase of about 35%.

Even more noteworthy is the rollout of the MI455X Helios platform. AMD began delivering the first batch of MI455 series products to customers in Q3, which include several large cloud service providers and other enterprises. The company anticipates that OEMs like Hewlett Packard Enterprise, Dell, Lenovo, and Super Micro will ramp up shipments of related products through Q4.

This means AMD is moving from providing a single AI chip to expanding into rack-level compute systems. Helios integrates Instinct GPU and EPYC CPU into a unified rack-scale platform, targeting the needs of large-scale AI infrastructure deployments. AMD disclosed that customers including Anthropic, Meta, Microsoft, OpenAI, and Oracle Cloud are already using the first batch of Helios systems.

The forecast for Q4 is also quite robust. AMD expects a median revenue of $17 billion, representing around 27% quarter-over-quarter growth; of this, data center revenue is expected to increase by approximately 50% sequentially. As the Helios platform gradually ramps up, the AI accelerator business is set to become a significant driver of the next phase of growth.

CPU Business Adds Fuel, Expected to Double by 2027

If GPUs are the frontlines where AMD battles for the AI compute market, then server CPUs provide another growth pathway.

Expansion of AI infrastructure does not mean only GPUs are needed. As the scale of AI model training and inference grows, data centers are increasing their demand for server CPUs. Especially in accelerated compute deployments, CPUs continue to serve as host nodes and handle related system tasks. AMD is leveraging its EPYC processors to expand market share in this arena.

Management expects that by 2027, server CPU business revenue is likely to double year-over-year, further up from a previously expected 70% increase. Citi believes the growth momentum comes from an increased share of host node CPUs in accelerated compute deployments, and higher average selling prices driven by greater core counts.

Goldman Sachs expects the server CPU market to grow at about a 50% compound annual growth rate through 2030, reaching $220 billion. AMD management also predicts that server CPU business will achieve 100% year-over-year growth by 2027.

This makes AMD’s growth logic no longer limited to AI GPUs. GPUs handle accelerated compute, while CPUs benefit from data center expansion and AI system deployments; together, these two business lines are growing AMD’s revenue base in the data center market.

Citi is especially optimistic about this combination. The bank names AMD as its top pick among large-cap growth computing chip stocks, with a target price of $800. Their assessment: AMD’s AI business has entered an acceleration phase, and investor focus is shifting from verifying its AI competitiveness to the multi-year volume ramp of MI450/MI455, Helios, and Venice, as well as the operating leverage scaling can deliver.

Behind High Growth, Capacity and Valuation Remain Challenges

However, AMD’s growth path is not without challenges.

First is supply. Citi points out that the primary constraint on AMD's data center growth is no longer customer demand, but supply capability. Chip manufacturing, advanced packaging, outsourced testing and assembly, memory, and rack-level components all require synchronized capacity expansion. AMD is increasing supply chain investments to improve supply, but capacity release will still take time.

Second is the impact of product mix changes on profit margins. Rapid growth in the AI GPU business may pressure overall gross margin. AMD's Q4 non-GAAP gross margin guidance is about 55%. Goldman Sachs believes the growth and scale effects of the server CPU business should partially offset margin pressures from the GPU product mix, and expects AMD to achieve significant operating leverage in 2027: operating expense growth will be less than half the pace of revenue growth.

The PC market, however, is another drag. AMD expects global PC shipments to decline by double-digits in 2027, and its client segment revenue may also fall year-over-year. The high growth of the data center business needs to be enough to offset weakness in the traditional business.

Wall Street is not entirely united in its assessment of AMD. Goldman Sachs maintains a Buy rating with a $675 target; Citi sets an $800 target and makes it their top pick; JP Morgan, though raising its target from $550 to $575, still maintains a Neutral rating. JP Morgan recognizes AMD's execution and growth prospects but believes the current share price already reflects much of the expected performance, and there is still uncertainty around long-term market share gains.

Judging from the views of the three firms, AMD's growth potential is widely recognized, but whether this growth can fully translate into shareholder returns remains an issue for investors to consider.

For AMD, the key going forward is not just whether Helios can ramp successfully, but also whether server CPUs can continue to deliver doubling growth, and if new capacity can keep pace with customer demand. Dual expansion in GPU and CPU is opening up a larger AI market for AMD; but how far this counterattack will ultimately go depends on whether delivery, margins, and market share can be realized in tandem.