Advanced Micro Devices, Inc. · Q2 2026 call

We delivered another outstanding quarter with record revenue and profitability as adoption of our leadership products continued to expand. Revenue increased 50% year-over-year to 11.5 billion, driven by significantly higher sales of EPYC, Instinct, Ryzen, and embedded processors. Data center revenue more than doubled year-over-year and now represents 58% of total revenue, up from 42% a year ago

Anthropic will deploy up to 2 gigawatts of MI450 series GPUs in Helios, with deployment of the first gigawatt beginning in the first half of 2027.

the overall data center market opportunity is expanding far more rapidly than we projected just six months ago. […] We now expect the data center AI accelerator market to grow more than 45% annually to approximately $1.4 trillion by 2030, and we expect the server CPU market to grow more than 50% annually to approximately $220 billion by 2030.

we now expect server revenue to grow more than 80% year-over-year in the second half of 2026, and more than 70% for the full year 2027 off a much higher base. Taken together, we now expect data center segment revenue to more than double year-over-year in 2027.

Looking to the second half of the year, we're planning for softer PC market as higher memory and component costs weigh on demand.

we are tracking materially ahead of the long-term financial model we shared at our financial analyst day last November. We now expect revenue to grow substantially above our prior target of greater than 35%, and we expect to significantly exceed our $20 annual EPS target within our strategic time frame.

We had an outstanding second quarter, marking our sixth consecutive quarter of greater than 30% year-over-year revenue growth.

Gross margin for the quarter expanded to 56% up over 200 basis points year-over-year and 80 basis points sequentially, reflecting a favorable product mix and a growing contribution from our data center business.

during the quarter, we generated a $2.4 billion in cash from continuing operations and a $1.6 billion in free cash flow. Inventory increased sequentially to approximately 8.5 billion to support strong data center demand.

We expect revenue to be approximately $13 billion, plus or minus 300 million.

Once it ramps, not only it add tremendous revenue for the company, but also gross profit, even though the gross margin is slightly below corporate average.

We do recognize in this memory environment, though, every customer is looking at how to optimize their memory footprint. And we have the opportunity, if desired, to also modify that memory footprint if the total cost of ownership is not as significant in certain workloads.

when I was talking about Helios was ahead of our initial forecast, it was as it relates to the overall volumes.

I think when we talk about this acceleration, we're talking about the second half versus the first half.

we do expect the overall data center business to be well over 100%. And the well over 100% comes because the data center AI business is going to be well over 100% just given the strength of our strategic customers, the ramp of Helios, and all of the things that we've talked about.

I think what you're hearing from us is that your data center AI number is probably too low. And maybe back to Stacy's question, without going into exact numbers, I think this notion of over 100% should consider be well over 100%.

the server CPU supply chain is tight right now and it has been tight for the first half of the year because much of this demand was unforecasted. As we get into 2027, the demand is better forecasted. And so we would expect that the 2027 server supply situation should be better than '26.

you should expect us to manage OpEx increase less than the top line revenue growth. That's what our business model is designed for. So we can drive more operating leverage to deliver earnings per share.