Advanced Micro Devices (AMD) reported second-quarter earnings that surpassed analyst expectations, with adjusted earnings per share of $1.66 compared to the anticipated $1.62, and revenue of $11.54 billion exceeding the $11.28 billion forecast.
This represents a remarkable 50% increase in revenue from $7.69 billion a year ago, primarily driven by a 107% surge in Data Center sales, which reached $6.7 billion. This growth is attributed to strong sales of both central processing units (CPUs) and graphics processing units (GPUs), positioning AMD as a key player in the artificial intelligence (AI) chip market.
Despite the positive earnings report, AMD's stock declined in extended trading, reflecting potential investor concerns. The company anticipates revenue of approximately $13 billion for the current quarter, slightly above the consensus estimate of $12.52 billion, although some analysts had hoped for guidance as high as $14 billion.
AMD has also revised its outlook for the semiconductor industry, projecting it could reach a value of $2 trillion annually by 2028, with AI accelerators contributing $1.4 trillion, a significant increase from a previous estimate of $500 billion.
Additionally, AMD is set to ship its first rack AI system, Helios, to major clients including Meta, OpenAI, and Oracle, marking a direct competition with Nvidia's offerings. CFO Jean Hu expressed optimism about accelerating Data Center sales in the latter half of 2026, which could lead to stronger revenue growth and earnings expansion.
However, the consumer segment, which includes CPUs and GPUs for laptops, only saw a modest 6% year-over-year growth to $3.8 billion, while the embedded segment grew 19% to $977 million. Overall, AMD reported a net income of $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