AMD reported the strongest quarter in its history after the close last night.
What was reported
| Quarter | Year ago | Change | |
|---|---|---|---|
| Revenue | 11,536 | 7,685 | +50% |
| Gross profit | 6,203 | 3,059 | +103% |
| Gross margin | 54% | 40% | +14pt |
| Operating income | 1,990 | (134) | loss to profit |
| Net income | 2,297 | 872 | +163% |
| EPS | $1.38 | $0.54 | +156% |
| Adjusted EPS | $1.66 | $0.48 | +246% |
In millions of dollars
The engine: Data Center
The Data Center segment brought in $6.7 billion - up 107%.
And in the company's release, quoting Jean Hu: it represented 58% of company revenue in the quarter.
Which means AMD is no longer a PC processor company that also has a server business. Most of its business today is data center.
| Segment | Revenue | Change |
|---|---|---|
| Data Center | 6,700 | +107% |
| Client and Gaming | 3,800 | +6% |
| of which: Client | 3,100 | +23% |
| of which: Gaming | 779 | -31% |
| Embedded | 977 | +19% |
In millions of dollars
And here you have to stop and adjust
The year-ago comparison base is skewed downward
A footnote in the report itself states: second-quarter 2025 results included $800 million in inventory and related charges, following the U.S. Government's export control on the Instinct MI308 data center GPU.
Meaning: the year-ago quarter was weak for a one-off reason, so every growth percentage looks larger than it is.
Excluding the charge:
- Gross profit a year ago was roughly $3.86 billion rather than $3.06 - a margin of about 50%, not 40%. The real expansion is about 4 percentage points, not 14.
- Operating income a year ago was roughly $666 million rather than a $134 million loss - so this is growth of about 199%, not the swing from loss to profit shown in the table.
This is still a very strong quarter. But anyone quoting 14 points of margin is quoting a number partly created by comparison to a damaged base.
The side that weakened
Gaming revenue fell 31% to $779 million, on lower semi-custom revenue - the chips the company makes for consoles.
That explains why the Client and Gaming segment as a whole grew only 6%, even though the Client business inside it grew 23% on demand for Ryzen processors.
The guidance
For the third quarter AMD guides to approximately $13 billion, plus or minus $300 million.
That is growth of roughly 41% year over year and about 13% sequentially, with an expected non-GAAP gross margin of about 56%.
And the release adds explicitly: "We expect Data Center sales to accelerate in the second half of 2026."
And who is buying
AMD launched Helios, a rackscale solution. Per the company's release, it is being deployed at Anthropic, Cirrascale, HUMAIN, Meta, Microsoft, OpenAI, Oracle, Tensorwave and Vultr.
That list of names is itself a data point: these are precisely the organisations building global compute capacity. And when they appear on both Nvidia's and AMD's customer lists, it means the market is large enough for both.
Also launched were the Instinct MI400 Series - including the MI455X for large-scale training and inference and the MI430X for high-performance computing - and 6th Gen EPYC server CPUs.
My Angle
A personal opinion of Ilan Abramov - not advice, not a recommendation
This is a strong quarter, and I want to be precise about how strong.
What is entirely real: a Data Center segment that more than doubled and is now 58% of the company. That is not an accounting outcome - it is customer orders. AMD has turned from a processor company into an AI infrastructure company, and this quarter is the point where that shows up in the numbers in a way you cannot argue with.
And what I refuse to quote without a note: the 14-point margin jump. The year-ago quarter included an $800 million charge from export controls. Excluding it the expansion is about 4 points - still good, but a completely different story.
What interests me most is the Helios customer list. When the same names appear at both Nvidia and AMD, it means buyers are not picking one supplier - they are buying from both. In a market where demand exceeds supply, that is a situation which benefits the second player, not only the first.
And what I will check next quarter: whether Gaming keeps falling. Minus 31% is not noise.
