Can Strong Data Center Revenues Boost AMD's Top Line in Q2 Earnings?

Advanced Micro Devices AMD is expected to have benefited from strong Data Center revenues in the second quarter of 2026, the results of which are scheduled to be released on Aug. 4, 2026. Click here to know how AMD’s overall second-quarter performance is likely to be.

AMD’s Data Center Revenues to Ride on Strong EPYC Demand

AMD's Data Center business is expected to have benefited from continued strength in EPYC server CPUs and Instinct AI accelerators. The company guided for double-digit sequential growth in the Data Center segment, driven by more than 70% year-over-year growth in server CPU revenues as hyperscalers and enterprise customers expanded AI infrastructure deployments.

Demand for EPYC processors is expected to have benefited from accelerating AI adoption, particularly inferencing and agentic AI workloads, which require additional CPU compute for orchestration, data movement and accelerator head-node functions. Per AMD, every major cloud provider has been expanding its EPYC footprint, while enterprise adoption continued to strengthen across financial services, healthcare, industrial and digital infrastructure customers. 

Advanced Micro Devices, Inc. Revenue (TTM)

Advanced Micro Devices, Inc. revenue-ttm | Advanced Micro Devices, Inc. Quote

The company also projected server CPU revenue to grow more than 70% year over year in the to-be-reported quarter, reflecting continued market-share gains and robust demand for fifth-generation EPYC Turin processors. AMD faces stiff competition from Intel INTC in the server CPU market. Intel continues to emphasize AI-optimized Xeon processors for inference workloads, extensive software compatibility and a broad OEM ecosystem. Intel is also investing in AI accelerators and integrated CPU-GPU solutions, while leveraging its long-standing presence in enterprise data centers to defend its installed base.

The Data Center AI business is also expected to have contributed meaningfully to second-quarter performance. The business is likely to have benefited from continued customer engagement, growing production deployments and expanding demand for Instinct GPUs across cloud, enterprise and sovereign AI customers. This has been helping AMD steer off competition from the likes of NVIDIA NVDA and Broadcom AVGO. 

Cloud customer momentum is expected to have remained another tailwind in the to-be-reported quarter. AMD expanded EPYC-powered cloud instances with AWS, Google Cloud, Microsoft Azure and Tencent, while Meta committed to deploying up to 6 gigawatts of AMD Instinct GPUs and adopting sixth-generation EPYC processors. These partnerships, together with ongoing software improvements through ROCm and strong MLPerf benchmark results, are expected to have reinforced AMD's competitive position in AI infrastructure and supported continued Data Center growth in the second quarter.

The Zacks Consensus Estimate for second-quarter Data Center revenues is pegged at $6.497 billion, indicating impressive year-over-year growth of 100.5%.

AMD Faces Stiff Competition in Data Center

Broadcom is emerging as one of AMD's biggest competitors in AI infrastructure through its custom AI accelerator (XPU) business. Broadcom expects AI semiconductor revenues to reach $56 billion in fiscal 2026 and exceed $100 billion in fiscal 2027, supported by multi-generation custom AI chip programs with Google, Meta, OpenAI and other hyperscalers. Broadcom is also strengthening its networking leadership with 100-terabit and upcoming 200-terabit Ethernet switches, co-packaged optics, high-speed SerDes and AI fabrics that support massive AI clusters. 

NVIDIA continues to dominate AI infrastructure through its integrated hardware, networking and software ecosystem. NVIDIA reported $75 billion in Data Center revenue in the first quarter of fiscal 2027, driven by rapid adoption of Blackwell systems across hyperscalers, AI cloud providers, enterprises and sovereign AI deployments. Beyond GPUs, NVIDIA is widening its competitive moat through its full-stack platform that combines Grace CPUs, Blackwell GPUs, NVLink, Spectrum-X Ethernet, InfiniBand networking and CUDA software.

Client & Gaming Expected to Support AMD’s Q2 Results

AMD’s Client & Gaming segment is expected to post modest sequential growth in the second quarter of 2026, supported by continued strength in the client business. Gaming revenues are also expected to contribute to second-quarter growth. Overall, AMD guided for modest sequential growth in the Client & Gaming segment in the second quarter.

The Zacks Consensus Estimate for second-quarter Client & Gaming revenues is pegged at $3.824 billion, indicating sequential growth of 6%.

AMD’s Embedded Expected to Accelerate in Q2

AMD expects the Embedded segment to rebound in the second quarter of 2026 with double-digit sequential and year-over-year revenue growth. The improvement is expected to have been driven by strengthening demand across multiple end markets following the return to year-over-year growth in the first quarter. Continued momentum in embedded computing, supported by increasing adoption of embedded x86 products, strong design-win activity and expanding opportunities across adaptive computing, communications, aerospace & defense, and industrial markets.

The Zacks Consensus Estimate for second-quarter Embedded revenues is pegged at $948 million, indicating year-over-year growth of 15%.

Zacks Rank

AMD currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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