AMD data center surges as gaming revenue slips

Driven by surging demand for AI computing capacity, AMD’s data center revenue hit $6.7 billion in its latest quarterly report, more than doubling year-over-year. That figure marks a jump from $5.8 billion in Q1 and represents a 107 percent increase from the $3.2 billion the company posted during the same stretch last year. During Tuesday’s earnings call, AMD CEO Lisa Su projected that data center segment revenue will more than double year-over-year in 2027 as well.

Meanwhile, the company’s gaming division took a hit, with revenue falling 31 percent compared to the prior year to $779 million. Price increases and component shortages dampened sales for the Xbox Series X / S, PS5, and Valve’s Steam Deck. Su explained to analysts after the earnings release that, “Gaming graphics revenue also declined year-over-year, as higher industry-wide component costs contributed to higher graphics card prices and weighed on overall demand.”

Overall, AMD posted record results. “Revenue increased 50 percent year-over-year to a record $11.5 billion, driven by continued strength in our Data Center business, which represented 58% of company revenue in the quarter,” wrote AMD CFO Jean Hu. The client segment, which covers PCs and laptops, saw revenue climb 23 percent thanks to Ryzen processor sales, while the broader PC and gaming business grew six percent compared to last year.

Su framed the results as a reflection of a larger industry shift. “AI is driving a significant expansion in demand for compute across all of our markets, and our leadership portfolio and growing customer visibility position us exceptionally well to capture this expanding opportunity and deliver substantial revenue and earnings growth in the years ahead,” she said.