Advanced Micro Devices
AMD · NASDAQSemiconductors · Data Center & AI Accelerators
Since the Report − 3.8%
Close on Report DayAug 4
$489.28▼ 8.9%Report-Day Move
- Market Cap(Today)
- ≈ $768 B
- 1Y Return(At Report)
- + 184%
- P/E($5.76 · Trailing 12M)
- 81.7
- Net Margin(Trailing 12M)
- 15.6%
AMD delivered the highest quarterly revenue in its history at $11.54 billion, up 50% year over year, with data center revenue more than doubling to $6.72 billion — 58% of the company total on its own. The stock still fell about 9% after hours: at close to 60 times earnings, the $13.0 billion third-quarter outlook landed short of the $14 billion the most bullish corner of the market had already paid for. From here the focus is MI450 and Helios shipments, the 31% contraction in gaming, and the softer second-half PC demand management flagged.
Revenue (Q2)
$11.54B
▲ 50% YoY · Record
Data Center Revenue
$6.72B
▲ 107% · 58% of Total
Gross Margin (Non-GAAP)
56%
Up ~200 Bps YoY
EPS (Non-GAAP)
$1.66
Market Expectation $1.62
Q3 Revenue Outlook
$13.0B
± $0.3B · ~41% YoY
Gaming Segment
$779M
▼ 31% YoY
Quarterly Revenue ($ Billion)
7.69
9.25
10.27
10.25
11.54
12.7–13.3
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26E
- Annual Revenue Growth
- 50%$11.54B · All-Time Record
- Data Center Share
- 58% of revenue$6.72B · ▲ 107% YoY
- Gaming Segment
- $779M▼ 31% YoY · Console Cycle
Q3 2026 Company Guidance
- Revenue12.7 – 13.3 billion
Midpoint 13.0 · Market Expectation 12.52Entire Range Above Expectation ▲
- Gross Margin (Non-GAAP)56%
Flat versus Q2 · product mix caps the marginFlat Trend
- Operating Expenses (Non-GAAP)3.65 billion
Above Q2's 3.4 B$Spending Accelerating ▼
The blue band is the company's low–high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. Axis is ±4.2% around the midpoint.
- Free Cash Flow
- $1.6BIn the Quarter · $13.1B Cash
- Capital Expenditure
- $808M$282M a Year Earlier
- Operating Expenses (Non-GAAP)
- $3.4B▲ 40% YoY · Q3 Outlook $3.65B
“We delivered an excellent quarter, with record revenue and profitability as Data Center revenue more than doubled year-over-year.”
- Venice EPYC performance leap
- First Helios rack shipments
- Raised 2027 data center targets
Summary
AMD reported its second quarter of 2026 after the close on August 4 and delivered the highest quarterly revenue in company history: $11.54 billion, up 50% from a year earlier and 13% from the prior quarter. Non-GAAP earnings came in at $1.66 per share against a market expectation of $1.62. The heart of the story is the data center segment, where revenue rose 107% year over year to $6.72 billion and accounted for 58% of the company total on its own, producing $2.10 billion of operating income. Non-GAAP gross margin climbed to 56% and non-GAAP operating margin to 27%. For the third quarter, management guided to revenue of roughly $13.0 billion, plus or minus $300 million — about 41% annual growth.
The stock still lost roughly 9% in after-hours trading and slipped below $500 the next day. The reason is not a weak quarter but a higher bar. AMD had already gained 7% on the day of the report and was trading at close to 60 times earnings; the most optimistic corner of the market wanted a third-quarter outlook near $14 billion, and $13 billion is what arrived. Add the 31% contraction in gaming, the warning about softer PC demand in the second half, and capital spending that jumped from $282 million to $808 million in a year. As Shay Boloor of Futurum put it, the result was not bad — it simply was not exceptional. The price had bought exceptional.
Judged on the quarter itself, the picture is strong: revenue and earnings both cleared expectations, margins widened, the outlook points higher, and management raised its 2027 targets — data center revenue growing more than 100%, server CPU more than 70%, and earnings per share meaningfully above $20. Anthropic's commitment to up to 2 gigawatts of MI450 silicon shows the customer base extending beyond OpenAI and Meta. The caveats are real but secondary: gaming is shrinking, AI accelerator margins sit slightly below the corporate average, and operating expenses are climbing fast. Our score is 80 — a grade for the quarter, not a recommendation on the stock. For more on why a good quarter can still send a share price down, see our guides to valuation and investor psychology.
Full Review
ClaudeThe revenue engine is now entirely the data center.
Data center revenue grew 107% year over year to $6.72 billion and now carries 58% of the company's total on its own. A year ago that share was below half. Segment operating income was $2.10 billion, roughly a 31% operating margin — the most profitable business AMD has ever run. Growth rests on two legs: EPYC server processors and Instinct AI accelerators. On the call, Lisa Su said the next-generation EPYC part, Venice, delivers more than twice the performance per watt. The company also began shipping Helios during the quarter, a rack-scale system that combines Venice CPUs, MI450 GPUs and Pensando networking. In short, AMD is shifting from selling individual chips to selling complete racks into the data center, and the income statement shows it clearly.
Margins improved, the real test is the MI450 ramp.
Non-GAAP gross margin reached 56%, up about 200 basis points year over year and 80 basis points sequentially, with non-GAAP operating margin at 27%. CFO Jean Hu was explicit, however, that margin is driven largely by product mix and that MI450 gross margin sits slightly below the corporate average. Server CPUs pull the blended figure up; the AI accelerator ramp pulls it down. As MI450 volumes scale through 2027, that balance becomes the number to watch. Industry-wide component cost pressure sits on top of it. Margins look good today, but a flat-to-slightly-pressured 2027 is a genuine scenario.
The guidance was good; the bar was higher.
Management expects third-quarter revenue of about $13.0 billion, plus or minus $300 million: roughly 41% annual and 13% sequential growth, with non-GAAP gross margin again near 56%. That is above the average market expectation. The optimistic wing of the market, though, was looking for something closer to $14 billion, and the share price had been shaped around that scenario. This is a theme this site returns to often: a company can print a good quarter and still fall, because the price has already absorbed most of the future profit. AMD closed at $518.58 on report day, up 7% even before the numbers landed. When the bar is that high, beating expectations is not enough.
Gaming and client are the weak links in the story.
Gaming revenue fell 31% year over year to $779 million as the console cycle matured and component costs rose. Client revenue grew 23% to $3.06 billion, but management flagged a softening PC market in the second half — higher memory and component costs are feeding into PC prices and trimming demand. The embedded segment, by contrast, returned to growth, up 19% to $977 million at a 40% operating margin, with the company saying it is tracking toward more than $18 billion in new design wins. The net read: the non-AI businesses are no longer the growth engine, but embedded and server CPUs still act as ballast.
China curbs are off the agenda but distort the base.
The most easily misread figure in this quarter is the GAAP gross margin: 54%, far above the 40% of a year earlier. Most of that jump is not operational — it is the base effect. In the second quarter of 2025 AMD took $800 million in inventory and related charges after the U.S. government imposed export controls on its Instinct MI308 accelerators, which crushed that quarter's margin. The second quarter of 2026 carries no new write-down and no China line item the company chose to highlight. On the February 2026 call, Lisa Su said AMD was not forecasting China AI chip revenue beyond roughly $100 million for the first quarter given licensing uncertainty, and that cautious stance appears to have held. China is therefore not a source of loss for AMD today so much as an option left out of the model — upside if restrictions ease, and no line to lose if they tighten.
The 2027 target moved up, the gap is narrowing.
The most consequential sentence on the call was not about this quarter but about 2027: AMD now expects data center revenue to more than double year over year, server CPU revenue to grow more than 70%, and earnings per share to land meaningfully above $20. Lisa Su said the company is tracking materially ahead of its long-term financial model. On the customer side, Anthropic joins OpenAI, Meta and Microsoft Azure, committing to deploy up to 2 gigawatts of MI450-series GPUs in Helios, with the first gigawatt beginning in the first half of 2027. Management reiterated that revenue per gigawatt remains in the double-digit-billions range. Nvidia is still the clear market leader and AMD's share price knows it, but having several frontier model companies commit to a second supplier at gigawatt scale is a situation that did not exist two years ago.
Strengths
6- Data center revenue rose 107% year over year to $6.72 billion and, with $2.10 billion of operating income, became the company's main profit engine.
- Non-GAAP gross margin expanded to 56% (up roughly 200 basis points year over year) with non-GAAP operating margin at 27%.
- The customer base widened: Anthropic's commitment to up to 2 gigawatts of MI450 silicon joins OpenAI, Meta and Microsoft Azure.
- The embedded segment returned to growth, up 19% year over year to $977 million at a 40% operating margin.
- The balance sheet is comfortable: $13.1 billion in cash and short-term investments, $3.2 billion of total debt and $1.6 billion of free cash flow in the quarter.
- 2027 targets were raised: data center growth above 100%, server CPU growth above 70% and earnings per share meaningfully above $20.
Risks
6- Gaming revenue contracted 31% year over year to $779 million as the console cycle matured.
- Management warned of a softening PC market in the second half; memory and component costs are weighing on client demand.
- MI450 gross margin sits slightly below the corporate average, so the 2027 ramp could pull the blended margin down.
- Operating expenses rose 40% year over year to $3.4 billion and capital spending jumped from $282 million to $808 million.
- Helios yields are expected to improve only gradually over the first few quarters, and server CPU supply remains tight.
- The stock trades near 60 times earnings; even the $13 billion outlook fell short of the market's most bullish $14 billion scenario.
What to Watch
4- Early November 2026 — Q3 results: the first real test of the $13.0 billion plus or minus $300 million outlook and of MI450/Helios shipments.
- Late August 2026 — Nvidia's quarterly report: the overall direction of AI accelerator demand moves AMD shares directly as well.
- Q4 2026 — volume step-up for Helios rack systems, plus the planned cloud availability of the fast-inference service built with Cerebras.
- First half of 2027 — the first gigawatt of Anthropic's 2-gigawatt MI450 agreement is scheduled to come online.
Upcoming Earnings
To Understand This