AMD Stock Falls Despite Beating Q2 Earnings Expectations and Forecasting Strong AI-Driven Revenue

Advanced Micro Devices reported strong second-quarter fiscal 2026 results, with revenue rising 50% to $11.54 billion and adjusted EPS reaching $1.66, both beating consensus estimates. Growth was driven by the Data Center segment, where sales surged 107% to $6.72 billion. Despite projecting third-quarter revenue of $13 billion—above Wall Street's $12.52 billion estimate—shares fell up to 9% in extended trading, reflecting sky-high investor expectations for AI-driven returns.

AMD Q2 2026 earnings expectations

• ▪Advanced Micro Devices reported second-quarter fiscal 2026 adjusted earnings per share of $1.66, beating the analyst consensus estimate of $1.62.
• ▪Advanced Micro Devices projected third-quarter fiscal 2026 revenue of approximately $13 billion, plus or minus $300 million, which is above the average analyst estimate of $12.52 billion.
• ▪Advanced Micro Devices reported second-quarter fiscal 2026 revenue of $11.54 billion, representing a 50% year-over-year increase and exceeding the market consensus estimate of $11.28 billion.
• ▪Advanced Micro Devices expects its adjusted gross margin for the third quarter of fiscal 2026 to be approximately 56%.

MI350 AI chip revenue acceleration

• ▪Advanced Micro Devices had previously indicated that its MI350 series AI graphics processing units had entered the volume ramp-up stage.
• ▪Advanced Micro Devices agreed to invest up to $5 billion in Anthropic, contingent on deployment milestones.
• ▪Advanced Micro Devices agreed to sell Anthropic tens of billions of dollars worth of AI servers powered by up to 2 gigawatts of MI450 series chips starting in early 2027.

Data center business growth

• ▪Advanced Micro Devices CEO Lisa Su stated on a post-earnings conference call that the company expects its data center sales to double in fiscal year 2027.
• ▪Advanced Micro Devices reported second-quarter fiscal 2026 Data Center segment revenue of $6.72 billion, up 107% year-over-year and beating analyst estimates of $6.48 billion.
• ▪Advanced Micro Devices secured up to 2.5 gigawatts of data-center capacity through an infrastructure agreement with Core Scientific.

Helios rack-scale system orders

• ▪Advanced Micro Devices plans to ship its Helios rack-scale AI system to customers including Meta, OpenAI, and Oracle.
• ▪Advanced Micro Devices announced that its first rack-scale AI system, Helios, has entered full production and will begin shipping in the third quarter of fiscal 2026.
• ▪Advanced Micro Devices expects shipments of its Helios rack-scale AI system to ramp up in the fourth quarter of fiscal 2026.

EPYC server CPU performance

• ▪Advanced Micro Devices CEO Lisa Su stated that server revenue is expected to increase by more than 80% on an annual basis in the second half of fiscal 2026.
• ▪Advanced Micro Devices has captured server central processing unit market share from Intel as hyperscalers expand Epyc CPU adoption across internal infrastructure and public cloud offerings.

Stock price scenarios analyst targets

• ▪Advanced Micro Devices shares fell in extended trading on August 4, 2026, despite beating second-quarter earnings expectations and forecasting strong third-quarter revenue.
• ▪Bank of America raised its price target for Advanced Micro Devices stock to $620, while Jefferies raised its price target to $640.
• ▪Advanced Micro Devices stock has a consensus Strong Buy rating among 34 Wall Street analysts, with an average price target of $589.72.

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