AMD's AI Revenue Is Scaling. So Is Its Working Capital.
AMD's Q3 results were strong.
Revenue rose 45% to $13.38B. Data Center sales nearly doubled to $8.55B, while GAAP operating income more than doubled to $2.83B.
But the cash flow statement tells a more complicated story.
Q3 free cash flow was just $554M, down from $1.56B in Q2, despite higher revenue and operating profit.
Inventory increased by nearly $3B during the quarter. Receivables also rose substantially, partly offset by higher payables.
AMD's customer warrants add another layer. A $1.1B non-cash fair-value loss reduced reported earnings, while future warrant-related revenue reductions and potential dilution remain relevant to shareholders.
The bigger question is what happens as AMD scales MI450 and Helios.
Moving from individual chips toward rack-scale AI systems could increase the amount of working capital required before revenue becomes cash.
That doesn't invalidate the growth story. But it changes what investors need to measure.
The next test isn't just how many AI systems AMD ships. It's how efficiently those shipments turn into cash.
#stocks $AMD.US