AMD posts 50% revenue growth as data center sales more than double on AI demand

AMD reported record second-quarter 2026 results, with revenue rising 50% year over year to $11.5 billion and non-GAAP diluted earnings per share of $1.66, both ahead of expectations. The company’s data center business more than doubled to $6.7 billion, or 58% of total revenue, driven by strong demand for EPYC server processors and Instinct GPUs as AMD pushes deeper into AI infrastructure. GAAP diluted EPS was $1.38 and net income was $2.3 billion, while GAAP gross margin rose to 54% and non-GAAP gross margin reached 56%. AMD said third-quarter revenue should be about $13 billion, plus or minus $300 million, above consensus estimates near $12.5 billion to $12.6 billion, with non-GAAP gross margin around 56%. Analysts broadly argued that AMD’s AI and data center growth thesis remains intact despite the initially weak post-earnings stock reaction. Rosenblatt raised its price target to $700 from $665 and kept a Buy rating, joining other firms that have lifted targets into a roughly $465 to $700 range after the results. Rosenblatt cited data center revenue of $6.72 billion, above a $6.51 billion consensus, and said nothing in the quarter pointed to deceleration. The firm also raised its third-quarter revenue estimate to $13 billion from $12.70 billion and its adjusted EPS forecast to $1.93 from $1.88, versus a consensus of $1.89. The longer-term debate has shifted toward the pace of AMD’s AI ramp rather than the scale of the opportunity. Rosenblatt highlighted management’s expectation that server CPU revenue will grow more than 80% year over year in the second half of 2026, up from a prior estimate of 70%, and that total data center revenue will grow well over 100% in 2027, with data center AI revenue expanding well above 100%. Management said a $30 billion estimate for 2027 Instinct revenue was at the low end, while Helios shipments are set to begin late in the third quarter and scale up in the fourth quarter and the first quarter of 2027. AMD also raised its outlook for the broader HPC and AI market, projecting nearly $2 trillion by 2030 with annual growth of about 40%, up from a prior 35% estimate.