Advanced Micro Devices (NASDAQ:AMD) reported record second-quarter revenue and profitability, driven by growth in its data center, client and embedded businesses as demand increased for EPYC server processors and Instinct AI accelerators.
Revenue rose 50% year over year and 13% sequentially to $11.5 billion, Chief Executive Officer Lisa Su said on the company’s second-quarter 2026 earnings call. Data center revenue more than doubled to $6.7 billion and accounted for approximately 58% of total company revenue, compared with 42% a year earlier.
Data Center Growth Led by EPYC and Instinct
AMD said data center revenue increased 107% year over year, supported by demand for EPYC server CPUs and Instinct accelerators. The company recorded its fifth consecutive quarter of record server CPU revenue, with cloud and enterprise sales each rising more than 70% year over year.
Su said AMD gained x86 server revenue share as customers expanded deployments of its fifth-generation EPYC Turin and fourth-generation EPYC Genoa processor families. Turin processors now power nearly one-third of more than 1,600 EPYC public-cloud instance types globally, she said.
The company said its sixth-generation EPYC Venice family is in production, with major original equipment manufacturers expected to launch platforms and leading cloud providers planning deployments beginning later this year. Venice uses AMD’s Zen 6 core architecture and two-nanometer technology, according to Su.
AMD’s data center AI revenue also more than doubled year over year as Instinct MI350-series adoption broadened. The company said its Helios rack-scale AI platform, which combines Venice CPUs, MI450-series GPUs, Pensando networking and ROCm software, is now in production. Initial Helios shipments are expected to begin later in the third quarter and ramp through the fourth quarter and into 2027.
Su said demand for Helios is ahead of AMD’s initial forecasts in terms of expected volumes. The company has announced AI infrastructure commitments involving OpenAI, Meta, Anthropic and Microsoft. Anthropic plans to deploy up to 2 gigawatts of MI450-series GPUs in Helios systems, with the first gigawatt scheduled to begin deployment in the first half of 2027, according to AMD.
During the question-and-answer session, Su said AMD expects the server CPU business to grow more than 80% year over year in the second half of 2026 and more than 70% in 2027. The company expects its overall data center segment revenue to more than double in 2027, with AI accelerators driving a substantial portion of that growth.
AI Market Outlook and Supply Plans
AMD increased its outlook for the data center AI accelerator market, now forecasting annual growth of more than 45% to approximately $1.4 trillion by 2030. It expects the server CPU market to grow more than 50% annually to about $220 billion over the same period.
Su said the company sees the broader market for high-performance and AI computing growing at approximately 40% annually over the next several years and approaching $2 trillion by 2030. AMD expects to grow faster than that market, she said.
The company said server CPU supply is tight in 2026 following stronger-than-expected demand, but Su said AMD expects supply conditions to improve in 2027 as demand becomes more predictable and additional capacity comes online. AMD has been working across its supply chain, including wafers, back-end capacity, packaging and substrates, to support growth in server and AI products.
Hu said gross-margin performance in 2027 will depend in part on the pace of server CPU and data center AI ramps. Server CPU growth is expected to support margins, while data center AI products may carry gross margins below the corporate average but contribute substantial gross profit as volumes increase. Hu also cited recovering embedded revenue and continued client-business improvements as potential margin supports.
Client, Gaming and Embedded Results
AMD’s client and gaming segment generated $3.8 billion in revenue, up 6% year over year. Client revenue rose 23% to $3.1 billion, driven by record mobile processor sales and continued share gains, while gaming revenue declined 31% to $779 million, primarily because of lower semi-custom sales during the console cycle.
Su said Ryzen PRO sales increased more than 50% year over year as commercial adoption expanded. However, AMD expects a softer PC market in the second half as higher memory and component costs pressure demand. The company said it expects its client business to outperform the broader market.
Embedded revenue increased 19% year over year and 12% sequentially to $977 million, representing the segment’s strongest growth in more than three years. AMD cited strength in networking, aerospace and defense, test and measurement, emulation and communications. The segment produced operating income of $386 million, or 40% of revenue.
AMD said it is tracking toward more than $18 billion in new embedded design wins this year, led by networking, data center, communications, test and aerospace and defense customers.
Third-Quarter Outlook
For the third quarter, AMD forecast revenue of approximately $13 billion, plus or minus $300 million. At the midpoint, that would represent 41% year-over-year growth and approximately 13% sequential growth.
- Non-GAAP gross margin is expected to be approximately 56%.
- Non-GAAP operating expenses are projected at approximately $3.65 billion.
- AMD expects strong double-digit sequential growth in both data center and embedded revenue.
- The company expects a modest sequential decline in client and gaming revenue, as slight client growth is offset by a strong double-digit gaming decline.
Hu said AMD plans to continue investing in research and development but expects operating expense growth to remain below revenue growth over time, supporting increased operating leverage. Su said the company now expects revenue growth to substantially exceed its prior long-term target of more than 35% and expects to significantly exceed its previously stated $20 annual earnings-per-share target within its strategic timeframe.
About Advanced Micro Devices (NASDAQ:AMD)
Advanced Micro Devices, Inc (NASDAQ: AMD) is a global semiconductor company that designs and sells microprocessors, graphics processors, chipsets and adaptive computing solutions for a broad set of markets. The company’s product portfolio includes consumer and commercial CPUs under the Ryzen and Threadripper brands, data center processors under the EPYC brand, and Radeon graphics processing units for gaming and professional visualization. AMD also offers semi-custom system-on-chip (SoC) products for gaming consoles and other specialized applications, and provides supporting software and platform technologies for OEMs, cloud service providers and end users.
Founded in 1969, AMD has evolved from a supplier of logic chips into a diversified, fabless semiconductor designer.
