On Wednesday, shares of Advanced Micro Devices (AMD.US) fell more than 7%, trading at $480.71. The decline came after the company released its second-quarter earnings report on August 4th post-market, which showed both revenue and profit exceeding estimates, but its third-quarter revenue guidance of approximately $13 billion failed to meet the aggressive expectations of some investors who had anticipated over $14 billion.
Capital expenditures in the second quarter reached $808 million, significantly surpassing the market estimate of $298.6 million, marking a sharp year-over-year increase. This raised concerns that the company's profitability may be under pressure. The earnings report revealed that Advanced Micro Devices achieved a record second-quarter revenue of $11.536 billion, up 50% year-over-year and above the expected $11.3 billion. On a non-GAAP basis, earnings per share came in at $1.66, beating the consensus estimate of $1.62. The company's gross margin stood at 56%, while net profit reached $2.76 billion.
Management maintained an optimistic outlook for the medium to long term. CFO Jean Hu indicated that data center sales are expected to accelerate further in the second half of 2026, driving overall revenue growth and sustained profit expansion. CEO Lisa Su explicitly predicted that data center revenue would "double again" by 2027, and that server revenue would grow by more than 80% year-over-year in the second half of fiscal 2026. Earlier in July, Advanced Micro Devices had revised its total addressable market for the global semiconductor industry upward to $2 trillion by 2028, with the AI accelerator market contributing $1.4 trillion, a significant increase from the previous $500 billion forecast.
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