AMD Revenue Hits Record High Amid 2X Data Center Sales Surge

Remember when AMD appeared on rocky ground? That was forever ago, and these days, the chip designer has successfully transformed itself into an enterprise hardware powerhouse. This is reflected in a string of strong earnings reports, the latest of which shows AMD achieving record revenue of $11.5 billion in the second quarter, a gain of 50% compared to the same quarter a year ago, driven by another big surge in the data center.

AMD's data center segment pulled in $6.7 billion in Q2, representing a giant 107% year-over-year gain. Enterprise server hardware, including EPYC chips and Instinct accelerators, now account for more than half (58%) of AMD's entire quarterly revenue.

"We delivered an excellent quarter, with record revenue and profitability as data center revenue more than doubled year-over-year," said Dr. Lisa Su, AMD chair and CEO. "We enter the second half with strong momentum as EPYC demand accelerates, Instinct deployments scale, and Helios begins to ramp."

Dr. Su also pointed to "AI driving a significant expansion in demand for compute" across all of its markets. Along with its vast portfolio and growing customer visibility, AMD views itself as being in an exceptional position to capture more of the current expanding market opportunity to "deliver substantial revenue and earnings growth in the years ahead."

AMD executive vice president, chief financial officer, and treasurer Jean Hu echoed the sentiment as it relates to the data center, saying the company expects data center sales to "accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion."

You wouldn't know it by looking at the stock market's reaction. Shares of AMD are down more than 5% this morning. We don't pretend to be stock market savants around these parts, but we have noticed that solid earnings reports by big tech don't always translate into immediate stock gains. We saw a similar reaction last quarter to NVIDIA's massive earnings. That said, shares of AMD are up over 180% in the past year, and up around 350% in the past five years.

Outside of the data center, AMD saw its Client and Gaming segment increase 6% year-over-year to $3.8 billion. Client business revenue accounted for the bulk of that at $3.1 billion for a 23% gain. The strong demand for Ryzen processors helped to offset a 31% year-over-year decline to $779 million for AMD's Gaming segment.

During an earnings call, Dr. Su attributed the Gaming division slump to lower semi-custom sales at this stage of the console cycle. However, she also noted a decrease in graphics revenue resulting from "higher industry-wide component costs" that led to higher graphics card pricing.

That's tough for consumers, though for AMD, the high-margin data center that is partially responsible is more than picking up the slack. AMD also expects the good times to keep rolling for the foreseeable future.

"We are still in the early stages of a multi-year AI adoption cycle as deployments grow across a broad set of markets and workloads, driving demand for more compute and creating a clear path to significant revenue growth and earnings power in the years ahead," Dr. Su said.

Looking ahead, AMD expects to follow up its strong Q2 earnings with $13 billion in Q3 revenue, plus or minus $300 million.