AMD released its second-quarter 2026 earnings on August 5, posting data center revenue of $6.72 billion, a 107% increase year over year and roughly 15.6% higher than the prior quarter. The business segment was the main growth driver for the company.
Total revenue came in at $11.54 billion, up 50% year over year and a record for the company, beating the market consensus of $11.28 billion. Adjusted earnings per share reached $1.66, topping analyst expectations of $1.62.
Q3 Guidance Tops Estimates
For the third quarter, AMD guided revenue of about $13 billion, give or take $300 million, above the $12.52 billion analysts had penciled in. The company also expects an adjusted gross margin of roughly 56%.
AI Chip Push Accelerates
AMD is stepping up its challenge to Nvidia's dominance in AI chips. CEO Lisa Su said second-generation Helios AI servers, equipped with MI455X accelerators and TSMC's "Venice" processor, have entered full production and shipments are expected to begin in the coming months. Reports indicate AMD will start delivering the AI servers to Meta and OpenAI by the end of this quarter.
Even with the strong numbers, AMD shares dropped more than 9% in after-hours trading. The market's take: the company's performance was solid and the stock had already doubled this year, but investors were looking for even higher AI growth expectations and stronger guidance.
Gaming Business Slumps
AMD's gaming segment brought in $779 million in the second quarter, down 31% from a year earlier. The decline was tied to weaker sales of Xbox Series X/S, PS5 and Steam Deck, along with component supply constraints.