AMD Revenue Soars 50% but Stock Drops Amid AI Chip Market Uncertainty

Advanced Micro Devices (AMD) reported its second-quarter earnings on Tuesday, beating expectations but seeing its stock drop in extended trading. The company's revenue climbed 50% from $7.69 billion a year ago to $11.54 billion, with Data Center sales doubling to $6.7 billion.

The growth is largely driven by the demand for artificial intelligence chips and central processing units (CPUs) and graphics processing units (GPUs). AMD's stock has nearly tripled over the past year due to optimism about its AI chips, branded Instinct, taking a significant share of the market from Nvidia. The company also sees $1.4 trillion worth of revenue coming from AI accelerators by 2028, up from a previous estimate of $500 billion.

Despite beating expectations, AMD's CFO Jean Hu noted that Data Center sales are expected to accelerate in the second half of 2026, driving stronger overall revenue growth and continued earnings expansion. The company also expects about $13 billion in revenue for the current quarter, plus or minus $300 million, versus analyst estimates of $12.52 billion.