AMD shares fall 6.9% after reporting record $11.5 billion revenue

Advanced Micro Devices (NASDAQ:AMD) reported quarterly revenue of $11.54 billion, up 50% from a year earlier, driven largely by its Data Center segment, which more than doubled to $6.7 billion and accounted for 58% of total sales. The company's Client division also grew, with revenue rising 23% to $3.1 billion, while Gaming revenue fell 31% to $779 million as demand for semi-custom chips weakened.

Research and development expenses increased 33% to $2.53 billion as AMD invests in its artificial-intelligence product roadmap. GAAP operating margin returned to 17% after last year’s export-control charges. The firm projected third-quarter revenue of roughly $13 billion, plus or minus $300 million, and expects a sequential revenue increase of about 12.7% with non-GAAP gross margin near 56%.

Despite the strong financial results, AMD’s shares dropped 6.9% during Wednesday’s regular session. Analysts noted that the stock is trading at roughly double its intrinsic value estimate, suggesting that investors may be pricing in future AI dominance rather than current earnings.

"Inventory rose to $8.47 billion, so investors will be watching whether those AI chips leave warehouses as quickly as they're being produced," a company spokesperson said.

The market’s reaction underscores the high expectations placed on AI-related semiconductor companies, where even record revenue can trigger profit-taking.