AMD Beats Q2 Estimates, Data Center Sales Double, But Stock Slumps

AMD reported second-quarter earnings Tuesday that beat expectations, but the stock slumped in extended trading.

The chipmaker posted adjusted earnings of $1.66 per share, above the $1.62 consensus, and revenue of $11.54 billion versus the $11.28 billion expected. Overall revenue climbed 50% from $7.69 billion a year earlier, a sign of AMD's central position in the market for artificial intelligence chips.

Data center sales were the main driver, coming in at $6.7 billion, up 107% year over year, which AMD attributed to CPU and GPU sales. Other segments were slower: client and gaming revenue rose just 6% to $3.8 billion, while embedded grew 19% to $977 million. Net income reached $2.3 billion, or $1.38 per diluted share, compared to $872 million, or 54 cents per share, in the year-ago period.

AMD expects about $13 billion in revenue for the current quarter, give or take $300 million, compared with expectations of $12.52 billion. Some analysts had been looking for guidance as high as $14 billion. In July, AMD raised its forecast for the semiconductor industry's annual size to $2 trillion by 2028, with $1.4 trillion of that coming from AI accelerators, up from a previous estimate of $500 billion.

This year, AMD will begin shipping Helios, its first rack-scale AI system, to companies including Meta, OpenAI, and Oracle, placing it in more direct competition with Nvidia's systems, not just its chips.

"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.

Source: CNBC