AMD ​forecast faster-than-expected 2027 growth as its data-center sales surge and its multibillion-dollar challenge to Nvidia gathers pace, sending its ‌shares up 7% in premarket trading.

The forecast and market-beating third-quarter results offered a strong counterpoint on Tuesday to mounting fears that the AI boom is losing steam and soothed investor concerns after rival Intel issued a weak outlook last week.

On a conference ​call with analysts, AMD CEO Lisa Su said the company expects overall revenue to rise more than 80% in 2027. ​Su's forecast is higher than the 77% growth analysts estimate, according to LSEG data.

Su told analysts that 80% ⁠of sales next year will come from data-center chips that will "drive the majority of our revenue and earnings growth."

"We see demand across the ​data-center business, across our CPU business, as well as our data-center AI business," Su said. "And when you look at the rate and pace of ​that growth, we've been planning for it for the last several years."

Data-center revenue jumped 97% to a record $8.55 billion in the third quarter, exceeding estimates of $8.20 billion.

The company expects fourth-quarter revenue of about $17 billion, plus or minus 3%, above analysts' average estimate of $16.23 billion, according to data compiled by LSEG.

AMD's line of chips ​is positioned to benefit from the massive AI data-center buildout, portfolio manager at Gabelli Funds Hendi Susanto said.

"The stock's resilience despite broader pressure ​on AI-related names suggests investors see AMD's results as confirming its technology leadership and its strong position to keep gaining market share," he added.

AMD is benefiting ‌as a ⁠shift in AI workloads toward running models in real-world applications drives demand for its graphics processing units and central processors.

"The AMD numbers provide a greatly needed boost both for AI infrastructure and even, to a smaller degree, the PC market," chief analyst at TECHnalysis Research Bob O'Donnell said.

The company's adjusted gross margin is expected to be about 55%, in line with estimates of 55.27% and down from 56% in the third ​quarter.

RAMPING UP AI ROLLOUTS

AMD has stepped ​up AI product rollouts, moving ⁠beyond standalone chips to compete with Nvidia's rack-scale systems.

The company's flagship Helios rack, combining its MI455X accelerator and new "Venice" server chips, is in production and set for a larger ramp-up in the fourth quarter. The ​initial systems are being tested at Meta.

AMD's third-quarter revenue rose 45% to $13.38 billion, beating estimates of $13.09 billion.

Adjusted ​profit came in ⁠at $2.09 per share, compared with estimates of $1.95.

The semiconductor industry is also grappling with a global memory shortage, leaving expensive high-bandwidth memory used in AI processors in scarce supply as manufacturers race to increase production.

Third-quarter sales in AMD's client and gaming segment, home to its PC chips and console processors, ⁠fell 8% ​to $3.72 billion, missing estimates of $3.79 billion.

AMD said it expects PC unit shipments to decline ​by a double-digit percentage next year, though Su said the company would "outperform the market."

Last week, Intel forecast its chip revenue to decline in the mid-20% range for its fourth ​quarter and the slowdown would last into 2027.