AMD Revenue Surges 50% as Data Center Sales More Than Double
The chip maker posted $11.5 billion in second-quarter revenue, driven by a 107% jump in data center sales that now account for more than half the business.
Advanced Micro Devices (AMD) reported second-quarter revenue of $11.5 billion, a 50% increase from a year earlier and a 13% sequential gain, as its data center division more than doubled and the company signaled further acceleration ahead.
The data center segment generated $6.7 billion in the quarter, up 107% year-over-year and 16% sequentially from the first quarter's $5.8 billion, and now represents 58% of total company revenue. The growth rate itself accelerated — the first quarter had posted a 57% year-over-year gain — and management guided for data center sales to accelerate again in the second half of 2026, pointing to stronger overall revenue growth and continued earnings expansion.
That trajectory was underpinned by a landmark deal: AMD and Meta announced a multi-year, multi-generation partnership to deploy up to 6 gigawatts of AMD Instinct GPUs, with first shipments beginning in the second half of 2026. As part of the arrangement, AMD issued Meta a performance-based warrant for up to 160 million shares tied to shipment milestones, tying the company's equity dilution directly to execution on the contract.
Profitability expanded alongside the top line. GAAP gross margin reached 54%, up 14 percentage points from 40% a year ago and up one point sequentially from the first quarter. On a non-GAAP basis, gross margin was 56%, recovering one point from the first quarter's 55% after a two-point sequential dip in the fourth quarter of 2025. Non-GAAP operating income more than tripled year-over-year to $3.1 billion, producing a 27% operating margin that was up 15 points from a year earlier and two points sequentially.
GAAP operating income swung to $2.0 billion from a loss of $134 million a year ago, a period that included $800 million in inventory and export-control charges. GAAP operating margin reached 17%, matching the fourth quarter of 2025 after a three-point sequential dip in the first quarter.
Diluted GAAP earnings per share were $1.38, up 156% year-over-year and 64% sequentially, while non-GAAP EPS was $1.66, up 246% from a year ago.
Outside the data center, results were mixed. The client business, which sells PC processors, posted $3.1 billion in revenue, up 23% year-over-year and roughly 7% sequentially, though the year-over-year growth rate slowed from 26% in the first quarter. The embedded segment accelerated to $977 million, up 19% year-over-year compared with 6% in the first quarter, a 12% sequential gain.
Gaming was the notable drag. Revenue fell to $779 million, down 31% year-over-year, reversing the first quarter's 11% annual gain. The company cited lower semi-custom revenue — the chips it designs for console makers — as the primary factor.
The quarter marked a clear inflection in AMD's financial profile. A year ago, the company was absorbing charges that pushed its GAAP operating margin into negative territory; in the latest period, data center demand alone contributed more revenue than the entire company generated in any quarter before 2025. With the Meta partnership adding a multi-gigawatt pipeline and management projecting further data center acceleration, the second half of 2026 will test whether AMD can sustain margins at this scale as it ramps shipments under the new contract.