Advanced Micro Devices announced second-quarter results on Tuesday that surpassed analyst expectations, yet the company’s stock fell during after-hours trading despite gains during the regular session. Revenue reached $7.69 billion, representing a 50% increase from the prior year, reflecting AMD’s significant participation in the artificial intelligence chip market.
The Data Center division served as the primary growth engine, generating $6.7 billion in sales and climbing 107% on an annual basis. This expansion stemmed from elevated demand for both central processing units and graphics processing units, with the company’s Instinct-branded AI chips and Epyc CPUs gaining market traction against competitors. AMD’s stock has nearly tripled over the preceding year on expectations that its AI accelerators will capture meaningful market share from rival Nvidia, alongside renewed CPU demand as industry experts identify processors as critical infrastructure for operating AI agents.
Looking ahead, AMD issued guidance of approximately $13 billion in revenue for the current quarter, with a range of plus or minus $300 million, exceeding LSEG consensus estimates of $12.52 billion. In July, the company elevated its semiconductor industry forecast, projecting a market valued at $2 trillion annually by 2028, with $1.4 trillion attributed to AI accelerators, compared with a prior estimate of $500 billion. The company plans to commence shipments of Helios, its first rack-scale AI system, this quarter to customers including Meta, OpenAI, and Oracle, with expectations for volume to accelerate in the fourth quarter.
Executives signaled confidence in continued momentum, with Chief Financial Officer Jean Hu stating that data center sales would accelerate in the second half of the year. Chief Executive Lisa Su projected that data center revenues would double in 2027 and server revenue would increase more than 80% on an annual basis in the second half of the company’s fiscal 2026. Su also noted that the CPU business gained market share during the quarter, with hyperscalers expanding Epyc deployment across their internal systems and public cloud offerings from major providers.
Elsewhere in the business, client and gaming segment revenue, which serves consumer devices, grew only 6% year-over-year to $3.8 billion, while the embedded segment expanded 19% to $977 million. Net income rose to $2.3 billion, or $1.38 per diluted share, compared with $872 million, or 54 cents per diluted share, in the year-ago period.
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