Advanced Micro Devices reported a record $11.5 billion in revenue for the second quarter ended June 30, up 50% from a year ago as the AI boom continues.
AMD said its gross margin was 54%, up 14 percentage points from a year ago. Operating income was $2 billion and net income was $2.3 billion, or $1.38 a share.
Advanced Micro Devices CEO Lisa Su said on July 23 in a keynote that the AI accelerator market is growing at a 45% compound annual growth rate (CAGR), from $200 billion (the size of the game industry) in 2025 to $1.4 trillion (the size of the whole chip industry) by 2030.
At her previous prediction, she estimated the number would be $500 billion. Server CPUs will grow to at a 50% CAGR $200 billion by 2030. No one company can service that whole market, Su said.
On a non-GAAP basis, AMD said its gross margin was 56%, operating income was $3.1 billion, net income was $2.8 billion and diluted earnings per share was $1.66. Analysts had expected $1.61 a share. Oddly enough, AMD’s stock is down 4.5% to $495 a share in after-hours trading.
“We delivered an excellent quarter, with record revenue and profitability as Data Center revenue more than doubled year-over-year,” said Su, in a statement. “We enter the second half with strong momentum as Epyc demand accelerates, Instinct deployments scale and Helios begins to ramp.”
Su added, “More broadly, AI is driving a significant expansion in demand for compute across all of our markets, and our leadership portfolio and growing customer visibility position us exceptionally well to capture this expanding opportunity and deliver substantial revenue and earnings growth in the years ahead.”
Of course, a constraint on the business is the shortage of memory. Asked if AMD could get enough allocation of HBM, or high-bandwidth memory chip supplies, Su said in a call with analysts that AMD has worked with memory chip partners for multiple years to have a strong ramp for what the company expects to deliver in 2027. She said AMD has an advantage as larger bandwidth matches large memory footprint and it helps with total cost of ownership for a system. The benefit of the memory is workload dependent, she said.
“Revenue increased 50% year-over-year to a record $11.5 billion, driven by continued strength in our Data Center business, which represented 58% of company revenue in the quarter,” said Jean Hu, AMD CFO, in a statement. “We expect Data Center sales to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion.”
Segment Summary
- Data Center segment revenue was $6.7 billion, up 107% year-over-year, driven by strong demand for AMD Epyc processors and AMD Instinct GPUs.
- Client and Gaming segment revenue was $3.8 billion, up 6% year-over-year. Client business revenue was $3.1 billion, up 23% year-over-year, primarily driven by strong demand for AMD Ryzen processors. Gaming business revenue was $779 million, down 31% year-over-year, due to lower semi-custom revenue. That means game console Sony and Xbox sales are in decline as the 2019-era machines near their end of life.
- Embedded segment revenue was $977 million, up 19% year-over-year, as demand strengthened across multiple end markets.
Recent Highlights
- AMD announced a broad portfolio of high-performance and AI computing solutions and strategic partnerships to accelerate AI deployments at scale:
- Launched the AMD Helios™ rackscale solution, the world’s most powerful AI server rack. AMD Helios delivers leadership inference tokens per dollar and is being deployed by leading AI labs and cloud providers including Anthropic, Cirrascale, HUMAIN, Meta, Microsoft, OpenAI, Oracle, Tensorwave, Vultr and others.
- Launched the AMD Instinct MI400 Series GPU family, including MI455X, bringing leadership compute, memory capacity and bandwidth for large-scale AI training and inference, and MI430X, the most advanced accelerator for HPC and sovereign AI workloads.
- Introduced 6th Gen AMD EPYC server CPUs, built to deliver leadership performance across the full range of agentic AI, general-purpose and enterprise workloads.
- Released ROCm.ai, an AI-native developer experience designed to help developers build, deploy and optimize faster across AMD platforms.
- Announced a strategic partnership with Anthropic to deploy up to 2 gigawatts of MI450 Series GPUs in AMD Helios racks and a multiyear collaboration to optimize AMD Instinct GPUs and ROCm software development using Claude.
- Expanded collaboration with Microsoft to deploy AMD Helios racks at scale on Azure to power frontier model inference. Azure will also add two new AMD Epyc CPU-powered VM series and broaden its deployment of Pensando DPUs to support Azure networking services.
- Announced a collaboration with Cerebras to bring together AMD Helios and Cerebras Wafer-Scale Engine to improve efficiency, scalability and economics for ultra-low-latency inference serving.
- Launched the AMD Instinct MI350P GPU, designed to bring seamless AI acceleration to existing infrastructure with leadership token economics.
- Acquired MEXT, adding AI-powered predictive memory technology designed to optimize memory use and expand usable capacity for AI workloads.
- AMD extended its PC offerings for enterprises, developers and gamers:
- Released Ryzen AI Halo systems, purpose-built for developers to build, test and run agentic AI workflows locally with leadership performance optimized by AMD ROCm™ open software support.
- Expanded the AMD Ryzen PRO 9000 Series processor lineup, bringing AMD 3D V-Cache™ technology to enterprise workstations for the first time.
- Launched AMD Ryzen 7700X3D processors and extended support for Socket AM5 platforms through 2029, giving gamers more performance and longevity.
- Cisco and AMD are collaborating to bring together AMD Ryzen AI Halo systems with Cisco networking, observability and security capabilities, so enterprises can deploy, govern and manage hybrid and local agentic AI at scale.
- Expanded global availability of AMD Radeon RX 9070 GRE graphics cards, extending performance and advanced ray tracing capabilities to more gamers.
- AMD expanded its adaptive and embedded AI portfolio:
- Introduced AMD Ryzen AI Embedded X100 Series processors, a new family of embedded x86 processors integrating CPU, GPU and AI acceleration to power robotics, industrial automation and intelligent embedded systems.
- Announced AMD Kria™ AI solutions, including AMD Kria AI system-on-modules and the AMD Kria AI Robotics Developer Platform to accelerate the development of next-generation physical AI systems.
- Launched Versal™ Premium Series Gen 2 Memory on Package adaptive SoCs, to speed data transfer for test and measurement, professional video editing, communications and aerospace and defense workloads.
Current Outlook
For the third quarter of 2026, AMD expects revenue to be approximately $13 billion, plus or minus $300 million. The mid-point of the revenue range represents year-over-year growth of approximately 41% and a sequential increase of approximately 13%. Non-GAAP gross margin is expected to be approximately 56%.