Investors reacted to flat gross margins and rising capital spending despite record $11.5 billion quarterly revenue.
Advanced Micro Devices reported second-quarter revenue surged 50% year-over-year to a record $11.5 billion, driven by its data center segment, which more than doubled to $6.7 billion. Operating income for the segment reached $2.1 billion, reversing a loss from the prior year when $800 million in export-related charges impacted results.
The data center business, fueled by EPYC server processors and AI accelerators, now accounts for 58% of total revenue. Despite the strong performance, management’s guidance indicated flat gross margins amid rising capital expenditures, tempering investor enthusiasm.
AMD shares fell 9% in after-hours trading to around $473, erasing earlier gains of 7% during the regular session. The decline reflects concerns over the cost of sustaining rapid growth.