Advanced Micro Devices (AMD) reported second-quarter earnings that surpassed analyst expectations, with adjusted earnings per share (EPS) of $1.66 compared to the expected $1.62, and revenue of $11.54 billion versus the anticipated $11.28 billion for the quarter ended June 27 [1]. This marks a 50% increase in revenue from $7.69 billion a year ago, underscoring AMD's growing influence in the artificial intelligence chip market [1].
The company's Data Center unit was a standout, generating $6.7 billion in sales, up 107% year-over-year, driven by strong demand for both CPUs and GPUs [1]. AMD's net income also saw a significant rise, reaching $2.3 billion, or $1.38 per diluted share, compared to $872 million, or 54 cents per diluted share, in the same period last year [1]. Other segments showed growth as well: client and gaming revenue increased 6% to $3.8 billion, and the embedded segment grew 19% to $977 million [1].
Despite these robust results, AMD shares fell more than 10% in after-hours trading, following a strong performance during regular trading hours [1]. The stock had nearly tripled over the past year, buoyed by optimism around its AI chips (Instinct) and CPUs (Epyc), which have gained traction among hyperscalers such as AWS, Microsoft, Google, Oracle, and others [1].
Looking ahead, AMD provided guidance for the current quarter, expecting revenue of about $13 billion, plus or minus $300 million, which is above LSEG expectations of $12.52 billion but below some analyst estimates of up to $14 billion [1]. The company also raised its long-term outlook for the semiconductor industry, projecting it could reach $2 trillion annually by 2028, with $1.4 trillion from AI accelerators, up from a previous estimate of $500 billion [1]. AMD plans to begin shipping its first rack AI system, Helios, this quarter to major clients including Meta, OpenAI, and Oracle, with shipments expected to ramp up in the fourth quarter [1].
CFO Jean Hu stated, "We expect Data Center sales to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion" [1]. CEO Lisa Su noted that AMD's CPU business gained market share during the quarter, and hyperscalers continued to expand their use of Epyc CPUs across both internal infrastructure and public cloud offerings [1].
CONCLUSION
AMD delivered strong quarterly results with significant growth in revenue, net income, and data center sales, and provided optimistic guidance for the coming quarter. However, the stock declined sharply after hours, possibly reflecting investor concerns about guidance not meeting the highest analyst expectations. The company's continued expansion in AI and data center markets positions it for further growth, according to management statements.