AMD Revenue Surges 50%, Data Center Business Doubles, Yet Shares Tumble as Growth Outlook Fails to Impress the Market!
According to the results, for the second quarter ended June 27, AMD generated revenue of US$11.54 billion, up 50% year-on-year, beating the average market expectation of US$11.28 billion. Net income reached US$2.3 billion, or US$1.38 per diluted share, a significant increase from US$872 million in the same period last year. Excluding certain items, adjusted earnings per share came in at US$1.66, also above the market expectation of US$1.62.
The core driver behind the strong earnings was the data center business. Revenue from the segment surged 107% year-on-year to US$6.72 billion, exceeding expectations of US$6.48 billion. AMD attributed the growth to strong sales of both central processing units (CPUs) and graphics processing units (GPUs). Its EPYC server processors continue to gain market share from long-time rival Intel.
Chief Executive Officer Lisa Su revealed during the earnings call that hyperscale cloud customers, including Amazon AWS, Microsoft Azure, Google Cloud, and Oracle, are continuing to expand the deployment of EPYC processors across their internal infrastructure and public cloud services. As AI agent applications continue to emerge, CPUs have regained strategic importance in data centers as the key general-purpose processors for AI workloads, opening up a second battlefield for AMD in the AI era.
In the AI accelerator market, AMD continues to position itself as Nvidia's strongest challenger. As global technology giants and governments aggressively expand AI data center capacity, AMD is shifting from simply selling chips to providing fully integrated rack-scale systems that combine CPUs, GPUs, and networking equipment, directly competing with Nvidia's equivalent offerings.
One of the biggest highlights of this earnings report is that AMD's first rack-scale AI system, Helios, is about to begin shipments. Lisa Su stated during AMD's AI event in July that the second-generation Helios AI server, featuring the MI455X AI accelerator and the TSMC-manufactured "Venice" processor, has entered full-scale production and will begin shipping in the coming months. AMD expects Helios shipments to gradually ramp up in the fourth quarter, with initial customers including Meta, OpenAI, and Oracle, marking the company's entry into full-system competition in AI infrastructure.
However, the main trigger behind the sharp decline in AMD's share price was its third-quarter guidance. The company forecast third-quarter revenue of approximately US$13 billion, with a variance of plus or minus US$300 million. Although the midpoint is well above analysts' average expectation of US$12.52 billion, some Wall Street forecasts had already projected revenue well above US$13 billion.
Market Insight:
AMD is also facing industry-wide supply constraints. The company relies heavily on TSMC, the world's largest semiconductor foundry, whose limited advanced packaging capacity has become a key bottleneck restricting shipments of AMD's AI chips. Nevertheless, management remains highly optimistic about the medium- to long-term outlook. The company expects data center sales to accelerate further in the second half of 2026, driving continued revenue growth and earnings expansion.
