AMD's revenue climbs 50% and data center sales doubled, but the stock is down — SkimNews
SkimNews Take
The gap between doubled data center sales and a falling stock reveals that forward guidance has become the sole valuation metric for AI-exposed chipmakers, with trailing beats now treated as priced-in rather than additive.
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- AMD beat Q2 expectations with adjusted EPS of $1.66 (vs $1.62 expected) and revenue of $11.54 billion (vs $11.28 billion expected), climbing 50% year-over-year from $7.69 billion.
- AMD's Data Center unit drove the quarter with $6.7 billion in sales, up 107% year-over-year, which the company attributed to Epyc CPU and Instinct GPU sales.
- AMD's stock slumped in extended trading despite the beat and a near-tripling over the past year; some analysts had been looking for Q3 guidance as high as $14 billion versus AMD's $13 billion projection (plus or minus $300 million).
- AMD raised its 2028 semiconductor industry outlook to $2 trillion per year, with AI accelerators now expected at $1.4 trillion — up from a prior $500 billion estimate.
- AMD's Helios, its first rack-scale AI system using its own CPUs, GPUs and networking chips, begins shipping this quarter to Meta, OpenAI and Oracle, putting AMD in direct competition with Nvidia's complete systems; shipments are expected to ramp in Q4.
- CEO Lisa Su told analysts AMD expects data center sales to double in 2027 and server revenue to climb more than 80% in the second half of fiscal 2026, with Epyc gaining share from Intel at AWS, Microsoft, Google and Oracle.
- AMD posted $2.3 billion in net income ($1.38 per diluted share) versus $872 million a year earlier, while capital expenditures jumped to $808 million from $282 million in the year-ago period.
Why it matters: The stock drop despite a clear beat and 107% data center growth signals investors wanted bolder Q3 guidance — analysts had floated $14 billion versus AMD's $13 billion outlook. Helios shipping to Meta, OpenAI and Oracle marks AMD's first head-to-head with Nvidia at the rack-system level rather than the chip level, a structural expansion of the competitive fight.
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