AMD posts Q2 earnings beat as data-center revenue more than doubles

Advanced Micro Devices (AMD) reported second-quarter earnings on Tuesday that exceeded consensus estimates, posting adjusted earnings of $1.66 per share against the expected $1.62 and revenue of $11.54 billion versus $11.28 billion forecast. Revenue rose 50% from a year earlier, reflecting the chipmaker's expanding role in artificial-intelligence (AI) hardware.

The company's Data Center segment generated $6.7 billion in sales, up 107% year over year, driven by higher demand for its CPUs and GPUs. AMD said it expects revenue of roughly $13 billion, plus or minus $300 million, for the current quarter, compared with analysts' median estimate of $12.52 billion.

In July, AMD revised its outlook for the semiconductor market, projecting a $2 trillion annual size by 2028, with AI accelerators accounting for $1.4 trillion of that total. The firm also announced the upcoming shipment of Helios, its first rack-scale AI system, to customers such as Meta, OpenAI and Oracle, with larger volumes anticipated in the fourth quarter.

"We expect Data Center sales to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion," CFO Jean Hu said.

CEO Lisa Su told analysts that data-center sales are expected to double in 2027 and that server revenue could rise more than 80% in the second half of fiscal 2026. She added that demand for both accelerators and CPUs is exceeding prior expectations and that hyperscalers are expanding AMD's Epyc CPUs across internal and public-cloud infrastructures.

AMD's client and gaming segment, which supplies CPUs and GPUs for laptops and consoles, grew 6% year over year to $3.8 billion, while its embedded business rose 19% to $977 million. Capital expenditures increased to $808 million for the quarter, up from $282 million a year earlier.

Net income reached $2.3 billion, or $1.38 per diluted share, compared with $872 million, or $0.54 per diluted share, in the same period last year.