Advanced Micro Devices, Inc.

What they do

AMD designs and sells processors, GPUs, AI accelerators, and networking solutions across three reportable segments: Data Center, Client and Gaming, and Embedded. Key products include EPYC server CPUs, Instinct data center GPUs, Ryzen PC processors, Radeon gaming GPUs, semi-custom game console SoCs, and Pensando networking devices. The company outsources manufacturing and sells through direct sales, OEMs, ODMs, and channel partners.

Revenue drivers

• Data Center — FY2025 revenue of $16.6B, up 32% from $12.6B in 2024, driven by 5th Gen AMD EPYC processors and AMD Instinct MI350 Series GPUs; Q2 2026 revenue was $6.7B, up 107% year-over-year and 58% of company revenue.
• Client and Gaming — FY2025 revenue of $14.6B, up 51% from $9.6B in 2024, driven by AMD Ryzen processors, semi-custom game console SoCs, and Radeon gaming GPUs; in Q2 2026 Client was $3.1B (up 23%) and Gaming was $779M (down 31%).
• Embedded — FY2025 revenue of $3.5B, down 3% from $3.6B in 2024 due to mixed end-market demand; Q2 2026 revenue was $977M, up 19% year-over-year as demand strengthened across multiple end markets.

Recent performance

Q2 2026 revenue rose 50% year-over-year to a record $11.5B, with GAAP gross margin of 54%, operating income of $2.0B, net income of $2.3B, and diluted EPS of $1.38. On a non-GAAP basis, gross margin was 56% and EPS was $1.66. First-half 2026 revenue was $21.8B, up from $15.1B, and net income was $3.7B. FY2025 revenue was $34.6B, up 34%, with net income of $4.3B and operating cash flow of $7.7B. The company returned $1.3B to shareholders through buybacks in 2025.

Strategy

Management prioritizes accelerating Data Center growth and targeting an annual cadence of AMD Instinct GPU launches, beginning with the MI350 Series in 2025. In 2025 AMD launched the 5th Gen EPYC family and the Pensando Pollara 400 and Vulcano AI NICs. In Q2 2026 the company introduced the Helios rackscale solution, the Instinct MI400 Series GPU family, 6th Gen EPYC server CPUs, and the ROCm.ai developer platform. Management states that AI is driving significant expansion in compute demand across all of its markets and that its portfolio positions it to capture that opportunity.

Risks

• Export controls — US government export controls on AMD Instinct MI308 data center GPUs caused approximately $800M in inventory and related charges in Q2 2025 and $440M in FY2025, and future restrictions could further affect Data Center results.
• Customer concentration — Data Center revenue depends heavily on large hyperscale customers, OEMs, and ODMs, creating exposure to their deployment timing and capital spending cycles.
• Product transition execution — Rapid cycles of new GPU and CPU generations (Instinct MI350/MI400, 6th Gen EPYC) carry inventory, qualification, and timing risks, as seen with the MI308 write-down.
• Mixed end-market demand — Embedded revenue declined in FY2025 and gaming revenue fell 31% year-over-year in Q2 2026, leaving those businesses sensitive to demand variability.

Outlook

Management expects Data Center sales to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion. The company says EPYC demand is accelerating, Instinct deployments are scaling, and the Helios rackscale solution is beginning to ramp. CEO Dr. Lisa Su cited growing customer visibility supporting substantial revenue and earnings growth in the years ahead.