Overview
Since the Report + 14.4%
Revenue grew 50.0% year over year, EPS beat the estimate by 2.0%; the stock fell 8.9% in its first reaction.
- RevenueQ2
- $11.54B
- ▲ 50% YoY · Record
- Data Center Revenue
- $6.72B
- ▲ 107% · 58% of Total
Verdict
BUYAMD delivered the highest quarterly revenue in its history at $11.54 billion, up 50% year over year, with data center revenue more than doubling to $6.72 billion. The stock still fell about 9% after hours: the $13.0 billion third-quarter outlook landed short of the $14 billion the most bullish corner of the market had paid for. From here the focus is MI450 and Helios shipments, the 31% contraction in gaming, and the softer second-half PC demand management flagged.
Close on Report DayAug 4
$489.28▼ 8.9%Report-Day Move
- Market Cap(Today)
- ≈ $913 B
- 1Y Return(At Report)
- + 184%
- P/E(At Today's Price · $5.76 · Trailing 12M)
- 97.1
- Net Margin(Trailing 12M)
- 15.6%
Earnings Summary
In 30 Seconds- Revenue rose 50% to a record $11.54B, and adjusted EPS of $1.66 beat the $1.62 estimate.
- Data center revenue more than doubled, up 107% to $6.72B; Q3 revenue guidance is $13.0B (±$0.3B).
- The stock fell about 9% after hours as guidance came in below the market's more optimistic $14B scenario.
The Numbers
Gross Margin (Non-GAAP)
56%
Up ~200 Bps YoY
EPS (Non-GAAP)
$1.66
Market Expectation $1.62
Q3 Revenue Outlook
$13.0B
± $0.3B · ~41% YoY
Gaming Segment
$779M
▼ 31% YoY
Quarterly Revenue ($ Billion)
7.69
Q2 25 · $7.69 B
9.25
Q3 25 · $9.25 B · QoQ + 20.3%
10.27
Q4 25 · $10.3 B · QoQ + 11.1%
10.25
Q1 26 · $10.3 B · QoQ − 0.2%
11.54
Q2 26 · $11.5 B · QoQ + 12.5% · YoY + 50.1%
12.7–13.3
Q3 26E · 12.7–13.3 · QoQ + 12.7% · YoY + 40.6%
- Q2 25
- Q3 25
- Q4 25
- Q1 26
- Q2 26
- Q3 26E
Q3 2026 Company Guidance
- Revenue12.7 – 13.3 billion12.7 billion13.3 billion
Midpoint 13.0 · Market Expectation 12.52Even Low End 1.4% Above Estimate ▲
- Gross Margin (Non-GAAP)56%
Flat Versus Q2 · Product Mix Caps the MarginFlat Trend
- Operating Expenses (Non-GAAP)3.65 billion
Above Q2's 3.4 B$Spending Accelerating ▼
How to Read the Chart
The blue band is the company's low-high range; its length shows how much room the company left itself. The black triangle and the line beneath it mark where the market expected, and the notch in the band is the range's midpoint. The triangle appears only where a market expectation is known. When the company gave a single number rather than a range and no market expectation is known, that row gets no band at all: there is no length to measure and no position to compare. Axis is ±4.2% around the midpoint.
Segment and KPI Data
Revenue by Segment
- Data Center$6.72 BShare 58.2%▲ 107.0% YoY
- Client$3.06 BShare 26.5%▲ 23.0% YoY
- Embedded$977 MShare 8.5%▲ 19.0% YoY
- Gaming$779 MShare 6.8%▼ 31.0% YoY
Key Metrics
Free Cash Flow
$1.56 B
▲ 32.0% YoYPress Release
Operating Cash Flow
$2.37 B
▲ 62.0% YoYPress Release
Inventory
$8.47 B
Press Release
Shares are computed over the segment total: $11.5 B. Source: Press Release.
Metrics come only from the company's own filings; each one names the document it was taken from.
“We delivered an excellent quarter, with record revenue and profitability as Data Center revenue more than doubled year-over-year.”
- Venice EPYC Performance Leap
- First Helios Rack Shipments
- Raised 2027 Data Center Targets
Summary and Review
Summary
AMD reported Q2 after the close on August 4. Revenue was the highest in company history: $11.54 billion, up 50% year over year and 13% sequentially. Non-GAAP EPS was $1.66 against a market expectation of $1.62. The data center is the heart of it: revenue there rose 107% to $6.72 billion, 58% of the total, with $2.10 billion of operating income. Non-GAAP gross margin reached 56%, operating margin 27%. Q3 guidance is about $13.0 billion, roughly 41% annual growth.
The stock still lost roughly 9% after hours and slipped below $500 the next day. The reason is not a weak quarter but a higher bar. AMD had already gained 7% on report day and traded at close to 60 times earnings. The market's most optimistic corner wanted $14 billion for Q3; $13 billion arrived. Add the 31% contraction in gaming and the softer second-half PC demand warning. Capex also jumped from $282 million to $808 million in a year.
The quarter itself is strong: revenue and earnings beat, margins widened, the outlook points higher. Management also raised its 2027 targets. Anthropic's up-to-2-gigawatt MI450 commitment extends the customer base beyond OpenAI and Meta. Caveats are real but secondary: shrinking gaming, below-average accelerator margins, fast-rising opex. Our score is 80 — a grade for the quarter, not a recommendation on the stock. See our guides to valuation and investor psychology for why a good quarter can still send a price down.
Full Review
The revenue engine is now entirely the data center.
Data center revenue grew 107% year over year to $6.72 billion and now carries 58% of the company's total on its own. A year ago that share was below half. Segment operating income was $2.10 billion, roughly a 31% operating margin — the most profitable business AMD has ever run. Growth rests on two legs: EPYC server processors and Instinct AI accelerators. On the call, Lisa Su said the next-generation EPYC part, Venice, delivers more than twice the performance per watt. The company also began shipping Helios during the quarter, a rack-scale system that combines Venice CPUs, MI450 GPUs and Pensando networking. In short, AMD is shifting from selling individual chips to selling complete racks into the data center. The income statement shows it clearly.
Margins improved; the test is the MI450 ramp.
Non-GAAP gross margin reached 56%, up ~200 basis points year over year and 80 sequentially. Non-GAAP operating margin was 27%. CFO Jean Hu said margin is driven largely by product mix. MI450 gross margin sits slightly below the corporate average. Server CPUs pull the blended figure up; the AI accelerator ramp pulls it down. As MI450 volumes scale through 2027, that balance is the number to watch. GAAP gross margin is the easily misread figure: 54%, far above 40% a year earlier. Most of that jump is a base effect, not operations. In Q2 2025 AMD took $800 million in charges after export controls hit its Instinct MI308 accelerators. Q2 2026 carries no new write-down. On the February 2026 call, Lisa Su guided China AI chip revenue to roughly $100 million for Q1. China is not a loss source today, just an option left out of the model.
The guidance was good; the bar was higher.
Management expects third-quarter revenue of about $13.0 billion, plus or minus $300 million: roughly 41% annual and 13% sequential growth. Non-GAAP gross margin is guided again near 56%. That is above the average market expectation. The optimistic wing of the market, though, was looking for something closer to $14 billion, and the share price had been shaped around that scenario. As Shay Boloor of Futurum put it, the result was not bad — it simply was not exceptional. The price had bought exceptional. This is a theme this site returns to often: a company can print a good quarter and still fall, because the price has already absorbed most of the future profit. AMD closed at $518.58 on report day, up 7% even before the numbers landed. When the bar is that high, beating expectations is not enough.
Gaming and client are the weak links in the story.
Gaming revenue fell 31% year over year to $779 million as the console cycle matured and component costs rose. Client revenue grew 23% to $3.06 billion. But management flagged a softening PC market in the second half. Higher memory and component costs are feeding into PC prices and trimming demand. The embedded segment, by contrast, returned to growth, up 19% to $977 million at a 40% operating margin. The company says it is tracking toward more than $18 billion in new design wins. The net read: the non-AI businesses are no longer the growth engine. Embedded and server CPUs still act as ballast.
The 2027 target moved up, the gap is narrowing.
The most consequential sentence on the call was not about this quarter but about 2027. AMD now expects data center revenue to more than double year over year. It also targets server CPU revenue growth above 70% and earnings per share meaningfully above $20. Lisa Su said the company is tracking materially ahead of its long-term financial model. On the customer side, Anthropic joins OpenAI, Meta and Microsoft Azure. The deal covers up to 2 gigawatts of MI450-series GPUs in Helios, with the first gigawatt beginning in the first half of 2027. Management reiterated that revenue per gigawatt remains in the double-digit-billions range. Nvidia is still the clear market leader and AMD's share price knows it. But having several frontier model companies commit to a second supplier at gigawatt scale did not exist two years ago. Watch one line next quarter: where data center revenue goes from $6.72 billion.
Looking Ahead
Strengths and Risks
6 Strengths · 6 RisksStrengths
6- Data center revenue rose 107% year over year to $6.72 billion and, with $2.10 billion of operating income, became the company's main profit engine.
- Non-GAAP gross margin expanded to 56% (up roughly 200 basis points year over year) with non-GAAP operating margin at 27%.
- The customer base widenedAnthropic's commitment to up to 2 gigawatts of MI450 silicon joins OpenAI, Meta and Microsoft Azure.
- The embedded segment returned to growth, up 19% year over year to $977 million at a 40% operating margin.
- The balance sheet is comfortable$13.1 billion in cash and investments, $3.2 billion of debt and $1.6 billion of quarterly free cash flow.
- 2027 targets were raisedData center growth above 100%, server CPU growth above 70% and earnings per share meaningfully above $20.
Risks
6- Gaming revenue contracted 31% year over year to $779 million as the console cycle matured.
- Management warned of a softening PC market in the second halfMemory and component costs are weighing on client demand.
- MI450 gross margin sits slightly below the corporate average, so the 2027 ramp could pull the blended margin down.
- Operating expenses rose 40% year over year to $3.4 billion and capital spending jumped from $282 million to $808 million.
- Helios yields are expected to improve only gradually over the first few quarters, and server CPU supply remains tight.
- The stock trades near 60 times earningsEven the $13 billion outlook fell short of the market's most bullish $14 billion scenario.
What to Watch
4- Early November 2026Q3 results: the first real test of the $13.0 billion plus or minus $300 million outlook and of MI450/Helios shipments.
- Late August 2026Nvidia's quarterly report: the overall direction of AI accelerator demand moves AMD shares directly as well.
- Q4 2026Volume step-up for Helios rack systems, plus the planned cloud availability of the fast-inference service built with Cerebras.
- First half of 2027The first gigawatt of Anthropic's 2-gigawatt MI450 agreement is scheduled to come online.
Upcoming Earnings
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