AMD posts record $11.5bn Q2 revenue as data centre sales double
AMD has reported second-quarter 2026 revenue of $11.5 billion, a 50% year-on-year increase and a new quarterly record for the Santa Clara-based chipmaker. The result was driven overwhelmingly by its data centre business, which contributed $6.7 billion, or 58% of group revenue, after more than doubling compared with the same period a year earlier.
On a GAAP basis, net income reached $2.3 billion and diluted earnings per share came in at $1.38. Excluding acquisition-related amortisation, stock-based compensation and other non-cash items, non-GAAP operating income was $3.1 billion, representing a non-GAAP operating margin of 27%, up 15 percentage points year-on-year. Adjusted EBITDA for the quarter was $3.3 billion.
Product momentum and customer wins
AMD chair and chief executive Lisa Su attributed the quarter's performance to accelerating EPYC server CPU demand, expanding Instinct GPU deployments and the initial ramp of the Helios rackscale system. "We enter the second half with strong momentum as EPYC demand accelerates, Instinct deployments scale and Helios begins to ramp," Su said.
The Helios rack, which AMD positions as a high-density AI inference solution, is now being deployed by Anthropic, Meta, Microsoft, OpenAI and Oracle, among others. A separately announced strategic partnership with Anthropic covers deployment of up to two gigawatts of MI450 Series GPUs in Helios configurations, alongside a multiyear collaboration to optimise the underlying ROCm software stack using Anthropic's Claude models. AMD also expanded its Azure collaboration, with Microsoft committing to deploy Helios racks for frontier model inference and adding two new EPYC-powered VM series to the platform.
Outside data centres, the client business generated $3.1 billion in revenue, up 23% year-on-year, on strong Ryzen processor demand. Gaming was the one weak spot: revenue fell 31% to $779 million, reflecting lower semi-custom SoC shipments. The embedded segment returned to growth, rising 19% to $977 million as industrial and automotive end markets recovered. For Q3 2026, AMD is guiding revenue of approximately $13 billion, implying roughly 41% year-on-year growth and a 13% sequential increase.
Competitive landscape and export-control overhang
AMD's data centre trajectory puts it in direct competition with Nvidia, which continues to hold the dominant share of AI accelerator revenue. AMD has been closing the gap through software investment, particularly its ROCm open-source stack, which has historically lagged CUDA in developer adoption. The launch of ROCm.ai, described as an AI-native developer experience, is the latest attempt to reduce that friction.
The year-on-year comparison carries an important caveat: Q2 2025 included an $800 million inventory charge following US government export controls on the Instinct MI308 GPU, which suppressed last year's reported margins. Stripping that out, underlying growth is still robust but the headline percentage gains are flattered by the depressed base. Export controls remain a live risk: AMD's cautionary disclosures explicitly name national-security regulations and licensing requirements as material factors that could affect future results. With the US Bureau of Industry and Security continuing to tighten restrictions on advanced AI chip exports to certain jurisdictions, AMD's ability to sell Instinct GPUs into non-allied markets will remain a closely watched variable for investors throughout the second half of 2026.
Capital expenditure nearly tripled year-on-year to $808 million in the quarter, reflecting investment in capacity and tooling as demand scales. Free cash flow came in at $1.6 billion for the period, with AMD holding $13.1 billion in cash and short-term investments at quarter end.