AMD Drops 7% Despite Record $11.5B Revenue
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- AMD stock dropped 6.9% in Wednesday's regular session despite Q2 2026 revenue surging 50% year-over-year to a record $11.54 billion
- Data Center revenue more than doubled to $6.7 billion, now accounting for 58% of total sales on accelerating demand for EPYC CPUs and Instinct AI accelerators
- Client segment revenue climbed 23% to $3.1 billion, while Gaming revenue fell 31% to $779 million as semi-custom demand cooled
- AMD guided Q3 revenue to roughly $13 billion (plus or minus $300 million), implying about a 12.7% sequential jump and non-GAAP gross margin around 56%
- R&D spending jumped 33% to $2.53 billion as the company poured more cash into its AI roadmap, while GAAP operating margin swung back to 17%
- Inventory climbed to $8.47 billion, a figure investors will watch to confirm AI chips are leaving warehouses as quickly as they're being produced
- At $486.41, AMD trades roughly 96% above GuruFocus' GF Value estimate of $247.73, pricing in years of AI dominance rather than current earnings
Why it matters: AMD's ~7% selloff on a record quarter shows the bar for AI-exposed chipmakers has shifted from 'beat' to 'infinitely exceed.' With shares at nearly 2x GuruFocus' fair value estimate and $8.47 billion in inventory to convert into revenue, even a 12.7% sequential growth guide triggered profit-taking instead of celebration.
