Analysis
AMD booked a charge of $1.097 billion, about $1.1 billion, in the third quarter of 2026 for the change in fair value of warrants it issued to customers, according to its earnings release on November 3. AMD's 10-Q identifies those customer warrants as the ones issued to OpenAI and Meta Platforms, exercisable for up to a combined 320 million AMD shares subject to vesting and exercise conditions.
The charge landed in a record quarter: revenue rose 45% to $13.4 billion and data center revenue nearly doubled.
Why AMD took a $1.1 billion warrant charge
The warrants are remeasured every quarter, and the release says the change is driven by AMD's stock price and other valuation assumptions. In other words, the better AMD's stock does, the bigger the hit to GAAP earnings. The non-GAAP reconciliation adds the charge back at $0.66 per share, and the cash flow statement shows a non-cash impact from customer warrants of $1.179 billion for the quarter.
“- Data Center: a record $8.5 billion, up 97%, on EPYC processors and the launch of Instinct MI450 Series GPUs.”
Each of OpenAI and Meta can buy up to 160 million AMD shares at $0.01 each, with vesting tied to deploying up to 6 gigawatts of AMD's MI450 chips, Yahoo Finance reported. Yahoo put the fully unlocked 320 million shares at about 16% of the enlarged company and quoted the CFO tying the charge to "the increase in our share price and the changes in the estimated probability" of the warrant conditions being met.
AMD Q3 2026 results by segment
- Data Center: a record $8.5 billion, up 97%, on EPYC processors and the launch of Instinct MI450 Series GPUs.
- Client and Gaming: $3.7 billion, down 8%; client up 7% to $2.9 billion, gaming down 40% to $773 million.
- Embedded: $1.1 billion, up 29%.
- Profit: GAAP net income of $2.4 billion, or $1.46 a share; non-GAAP EPS of $2.09, up 74%.
Revenue of $13.38 billion and adjusted EPS of $2.09 beat consensus of $13.08 billion and $1.97, [24/7 Wall St. reported](https://247wallst.com/investing/2026/11/04/intel-drops-5-nvidia-retreats-2-after-amd-earnings-beat-and-strong-2027-outlook-as-intel-falls-3-amd-stock-goes-nowhere/), though the stock was basically unchanged in the next morning's trading.
Who is buying AMD's AI chips?
AMD says Anthropic, Meta, Microsoft, OpenAI and Oracle Cloud Infrastructure are running models and workloads on its first Helios rack-scale systems. It is also buying its way up the stack: the release lists agreements to acquire World Labs, which Pulse covered as an $8.2 billion all-stock deal, and inference chip startup Taalas. For scale, Arm said on November 4 that its own server share at the top hyperscalers passed 50% in 2025, the CPU competition AMD's EPYC line faces inside the same data centers.
What to watch: the dilution math
AMD guided fourth-quarter revenue to about $17 billion, plus or minus 3%, roughly 66% growth, with non-GAAP gross margin of about 55%. CEO Lisa Su said AMD expects revenue to grow more than 80% in 2027, per 24/7 Wall St. The catch is that hitting those numbers is what vests the warrants. If OpenAI and Meta deploy the full 6 gigawatts, AMD shareholders absorb the dilution of up to 320 million new shares, and every quarter the stock climbs, GAAP earnings take another non-cash charge. AMD's own risk factors now list the potential impact of stock price volatility on the fair value of customer warrants.