Advanced Micro Devices, Inc.

AMD reported Q2 2026 revenue of $11.5 billion, up 50% year over year and 13% sequentially. Diluted EPS increased approximately 82% year over year on a comparable basis. Gross margin was 56%, up over 200 basis points year over year and 80 basis points sequentially. Operating income was $3.1 billion, with a 27% operating margin. By segment, data center revenue was a record $6.7 billion, up 107% year over year; client and gaming revenue was $3.8 billion, up 6%; and embedded revenue was $977 million, up 19%. Jean Hu said AMD generated $2.4 billion in cash from continuing operations, $1.6 billion in free cash flow, ended the quarter with $13.1 billion in cash, cash equivalents and short-term investments, and had inventory of about $8.5 billion. For Q3 2026, AMD guided revenue to approximately $13 billion plus or minus $300 million, non-GAAP gross margin to approximately 56%, non-GAAP operating expenses to approximately $3.65 billion, other income/expense to about $55 million of income, a 13% tax rate, and diluted share count of about 1.66 billion.

Lisa Su framed the quarter as another step-up in AMD’s execution, saying adoption of leadership products continued to expand and that the company is still in the early stages of a multiyear AI adoption cycle. She emphasized strong demand across EPYC, Instinct, Ryzen and embedded, highlighted Helios and Venice as major upcoming growth drivers, and said customer demand for Venice is stronger than any prior EPYC generation. Her tone was notably upbeat and more confident than in prior periods, with repeated references to AMD being materially ahead of its long-term model.

Jean Hu focused on the financial acceleration: revenue up 50% year over year, gross margin at 56%, operating income of $3.1 billion, and free cash flow of $1.6 billion. She said operating expenses were $3.4 billion, up 40% year over year, mainly from R&D investment, and noted the business mix shift toward data center. On the balance sheet, she cited $13.1 billion of cash and short-term investments and inventory of about $8.5 billion to support strong data center demand. For Q3, she guided to roughly flat gross margin at 56% and opex of about $3.65 billion, while saying opex should grow slower than revenue to preserve operating leverage.

Analysts pressed AMD on how the 2027 growth outlook breaks down between server CPUs and data center AI GPUs, whether the company is supply constrained, and whether gross margins can hold up as Helios ramps. Lisa Su said both server and data center AI will grow substantially, that Q3 is just the beginning of the Helios ramp and Q4 should be materially larger, and that server CPU supply is tight in 2026 but should be better in 2027 as demand is more forecasted. On margins, Jean Hu said the mix will determine the outcome, with server CPUs and embedded acting as offsets to the lower-margin data center AI ramp. Analysts also asked about Helios demand, yields, memory intensity, and customer readiness; management said Helios volumes are ahead of initial expectations, yields should improve over the next few quarters, and HBM visibility for 2027 is good.