AMD Q2 Earnings Call Points to Faster Data Center Growth

Advanced Micro Devices, Inc. AMD used its Q2 2026 earnings call to raise the stakes around data center growth, highlighting stronger server demand, an accelerating Helios ramp and a larger artificial intelligence (AI) opportunity.

Record quarterly results provided the backdrop, but management’s central message was forward-looking: data center revenues should accelerate in the second half of 2026 and more than double in 2027.

AMD Raises the Data Center Growth Bar

Chair and chief executive officer Lisa Su said data center revenues rose 107% year over year to $6.7 billion and accounted for 58% of total revenues, driven by EPYC processors and Instinct accelerators.

Su said server revenues are expected to grow more than 80% year over year in the second half of 2026. For 2027, she projected growth of more than 70% from a higher base.

The broader data center segment is expected to more than double in 2027. In the Q&A, Su strengthened that message by saying the segment should grow well above 100% as data center AI scales.

Advanced Micro Devices Builds Helios Momentum

Su said Helios is in production, with initial shipments scheduled for later in the third quarter. The ramp should become more substantial in the fourth quarter and continue through 2027.

Customer demand is tracking ahead of AMD’s initial forecast. Su tied that momentum to commitments from OpenAI, Meta and Anthropic, along with Microsoft’s plan to deploy Helios on Azure.

Anthropic plans to deploy up to 2 gigawatts of MI450 Series graphics processing units in Helios racks, with the first gigawatt beginning in the first half of 2027. The agreement also includes multiyear engineering work on Instinct and ROCm.

AMD Guides to Another Sequential Step-Up

Executive vice president and chief financial officer Jean Hu guided third-quarter revenues to about $13 billion, plus or minus $300 million. The midpoint implies growth of approximately 41% year over year and 13% sequentially.

Hu expects strong double-digit sequential growth in data center and embedded, while Client and Gaming should decline modestly as gaming weakness offsets slight client growth.

The quarter’s results supported that outlook. Adjusted earnings of $1.66 per share topped the Zacks Consensus Estimate of $1.61, while revenues of $11.54 billion exceeded the $11.32 billion estimate.

Advanced Micro Devices, Inc. Price, Consensus and EPS Surprise

Advanced Micro Devices, Inc. price-consensus-eps-surprise-chart | Advanced Micro Devices, Inc. Quote

Advanced Micro Devices Manages Margin Trade-Offs

Hu said server CPU growth should support gross margin because the business is accretive to the corporate average. Data center AI carries a slightly lower margin, making the 2027 mix important.

Embedded recovery should provide another margin tailwind. Hu also pointed to operational improvements across clients and the broader company as additional levers.

For the third quarter, Hu expects a non-GAAP gross margin of about 56% and operating expenses of roughly $3.65 billion. She said longer-term operating expense growth should remain below revenue growth.

AMD Q&A Sharpens the 2027 Ramp

A Bank of America analyst asked about 2027 gigawatt visibility and revenue per gigawatt. Su did not confirm the analyst’s capacity estimate, but reiterated that revenue per gigawatt remains in the double-digit billions.

A Cantor Fitzgerald analyst tested an estimate of roughly $30 billion in 2027 Instinct revenues. Su indicated that figure was too low and emphasized that data center AI growth should be well above 100%.

A Morgan Stanley analyst pressed on server supply. Su said supply was tight in the first half of 2026, but better forecasting and added capacity should support the projected 2027 growth, with room for upside.

Advanced Micro Devices Keeps Broader Growth in View

Su’s tone remained confident and execution-focused, centered on supply expansion, annual platform launches and customer deployment timing rather than near-term demand concerns.

Hu reinforced a profitability framework built around operating leverage. The company’s direction coming out of the call is concentrated on scaling data center AI while continuing to expand server CPU and embedded revenues.

Zacks Signals Show a Mixed Style Picture

AMD carries a Zacks Rank #1 (Strong Buy), reflecting favorable earnings estimate revision trends. Its Growth Score of A is the strongest signal, while a Momentum Score of C and Value Score of F present a less balanced profile. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The VGM Score of D indicates that the combined value, growth and momentum setup is weaker than the growth score alone. The Zacks Rank can change as analysts revise estimates after the reported results, so these signals are not fixed or conclusive. 

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