Warrant Charges Cut AMD Q3 GAAP Earnings
Chipmakers granting equity warrants to big customers should expect GAAP results to swing with their own stock price.
Updated on Nov. 3, 2026 in Corporate Finance
AMD recorded a $1.097 billion non-cash charge tied to warrant liabilities issued to OpenAI and Meta, which lowered its GAAP diluted earnings per share by $0.66 in the quarter ended September 30, 2026. The company reported record quarterly revenue of $13.4 billion alongside the charge, with its data-center segment driving much of the growth.
Why it matters
Warrant liabilities are marked to market each quarter, so a rising AMD share price and stronger GPU demand raised the fair value of warrants issued to its large customers, and that difference hit reported earnings. For operators, the case shows how equity-linked customer incentives can create large swings in reported results even when operating performance is strong.
AMD reported Q3 2026 revenue of $13.4 billion, a 45% year-over-year increase, with data-center revenue of $8.5 billion up 97% from the prior year. GAAP net income was $2.43 billion against non-GAAP net income of $3.47 billion, and the warrant charge accounts for the gap.
The players
Advanced Micro Devices (AMD)
A semiconductor company that designs CPUs and GPUs, with its data-center segment serving cloud and AI infrastructure customers.
OpenAI
An artificial intelligence developer whose large GPU purchases tied to AMD warrants made it a significant AMD customer.
Meta
A technology company operating major social platforms that received AMD warrants tied to MI450 GPU purchase volumes.
The details
Under accounting rules, warrant liabilities are remeasured each quarter, so changes in the warrants' fair value flow through reported results. AMD issued warrants to OpenAI in October 2025 and to Meta in February 2026, each covering up to 160 million shares at $0.01 per share, tied to MI450 GPU purchase volumes and stock performance milestones. As AMD's stock price rose and GPU demand grew, the fair value of those warrants increased, and the $1.097 billion difference was recorded as a non-cash charge.
Timeline
October 2025: AMD issued warrants to OpenAI.
February 2026: AMD issued warrants to Meta.
September 30, 2026: Quarter ended with the $1.097 billion warrant charge and record revenue.
June 27, 2026: None of the warrants had vested as of this date.
Late October 2026: AMD announced a $1 billion investment commitment in a Meta equity offering.
Market Landscape
Customer-linked warrants, in which a chipmaker grants equity options to large buyers of its products, make earnings sensitive to its own share price under the mark-to-market rules for warrant liabilities. AMD's arrangements with OpenAI and Meta put that accounting effect at the center of its reported results.
Operators should recognize that equity warrants granted to large customers can produce quarterly GAAP swings driven by the share price rather than by operations. Finance teams reviewing any similar customer-linked arrangement should consult qualified accountants on how remeasurement will affect reported earnings.
The takeaway
Watch how dilution from warrants is disclosed as vesting milestones approach, since AMD noted that full exercise would dilute existing shareholders by about 19.6%. Companies granting similar customer warrants should track how fair-value changes move reported EPS each quarter.
Further reading
For more context on how these accounting effects play out across companies, explore Corporate Finance coverage.
Source note: This article includes information reported by Crypto Briefing.
