AMD: Aggressively Snatching "Big AI Orders", Why Is the Market Not Buying In?
AMD (AMD.O) released its Q2 2026 earnings report (covering the period ending June 2026) after U.S. market hours on the morning of August 5, 2026 Beijing time, with key points as follows:
1. Overall Performance: AMD posted revenue of USD 11.54 billion in Q2 2026, up 50% year on year, slightly beating market expectations of USD 11.3 billion. The accelerated revenue growth of the company this quarter is mainly driven by the doubling growth of its data center business.
The company's GAAP gross margin stood at 53.8% this quarter. In the same period last year, there was an impairment impact of around USD 800 million due to China regulatory factors. Excluding this impact, the gross margin increased by about 3.5 percentage points year on year, which mainly benefits from the rising proportion of high gross margin businesses such as server CPUs.
2. Operating Expenses: The company's R&D expenses this quarter amounted to USD 2.53 billion, up 33.5% year on year; its sales and administrative expenses reached USD 1.4 billion, up 41.4% year on year. The growth of the company's core operating expenses is slightly lower than the revenue growth rate, and the core operating expense ratio has dropped to around 34.1%.
AMD achieved a net profit of USD 2.3 billion this quarter, affected by non-recurring items. From an operational perspective, the company's core operating profit this quarter is USD 2.27 billion, up 29% quarter on quarter, and the core operating profit margin rebounded to 19.7%.
3. Business Segments: Driven by the growth of data center and client businesses, the combined revenue of the two segments accounts for more than 80% of the total.
1) Client business gaining market share: Revenue in this quarter reached USD 3.06 billion, up 22.5% year on year. Global PC market shipments declined year on year this quarter, while the company's client business growth rate remained above 20% (the price increase effect is estimated to be around 10%), which means AMD's share in the PC market is still rising;
2) Data Center: Server CPUs continue to grow rapidly, MI455X is about to ship. Revenue in this quarter reached USD 6.7 billion, up 16% quarter on quarter. The growth of the data center business this quarter is mainly driven by the tight supply and demand of server CPUs.
① Server AI GPU: AI GPU revenue this quarter is about USD 2.7 billion, mainly from the MI355 series products. The market pays more attention to the MI455X series products that will be shipped in the second half of 2026, which marks the company's first shift from "single-chip" to "rack-level cluster" delivery. The company has announced partnerships with customers such as Open AI, Meta, and Anthropic. The mass production ramp-up performance of the MI455X series will directly affect the final delivery situation.
② Server CPU: Driven by the increased demand for CPUs in the AI inference stage, server CPUs have been the main growth driver of the company since the second half of last year. Dolphin Analyst estimates that the company's server CPU revenue this quarter will reach more than USD 4 billion, up 12% quarter on quarter, and AMD's shipment share in the server CPU market has risen to more than 20%.
4. AMD Performance Guidance: Expected revenue for Q3 2026 is USD 12.7-13.3 billion (market expectation is around USD 12.6 billion), and the midpoint of the range (USD 13 billion) increases by 13% quarter on quarter. The company expects non-GAAP gross margin to be around 56% (market expectation is 56%).
Dolphin Research Overall View: Strong CPUs underpin performance, and the "breakthrough" of AI clusters is the key
AMD's earnings report this quarter is basically in line with market expectations. The company's revenue growth continues to accelerate, mainly driven by the doubling of the data center business this quarter.
The data center business is the core focus of the market. Dolphin Analyst estimates that AI GPUs (Instinct series) generated about USD 2.7 billion in revenue this quarter, compared with only USD 1.1 billion in the same period last year (of which the impact of China regulations was about USD 700 million); while other segments such as server CPUs generated USD 4 billion in revenue this quarter, up more than 80% year on year, mainly benefiting from the increased market demand for server CPUs in the AI inference stage.
For the next quarter's guidance, the company expects third-quarter revenue of USD 12.7-13.3 billion, up 10-15% quarter on quarter (market expectation is USD 12.6 billion); the company expects non-GAAP gross margin of around 56% in the next quarter (in line with market expectation of 56%). With other businesses remaining relatively stable, it can be estimated that the incremental revenue in the next quarter will mainly come from the data center business at about USD 1.2-1.8 billion (the quarter-on-quarter increment this quarter is about USD 1 billion). With the MI455X starting to ship, this accelerated quarter-on-quarter growth is actually not very "eye-catching".
Apart from this quarter's earnings report, the market is mainly concerned about the following aspects of AMD:
a) Capital expenditure of major tech companies: Cloud service providers are the largest chip purchasers
The four major CSPs have all released their latest earnings reports, and in particular Google, Meta and Amazon have once again raised their respective capital expenditures. For the 2026 outlook, Dolphin Analyst estimates that the total capital expenditure of the five core cloud vendors (Meta, Google, Microsoft, Amazon and Oracle) is expected to rise to more than USD 800 billion, with a year-on-year growth rate of over 80%.
The sharp pullback of the company's stock price some time ago was mainly affected by the "beta-level" concern of the market over the sustainability of capital expenditure. Recently, the performance of major companies after earnings reports has also shown obvious differentiation. The market focus has shifted from "capex = growth signal, the more the better" to "capex must be backed by accelerated monetization and healthy cash flow", among which Amazon and Microsoft are relatively higher quality. Since most major companies are still raising capital expenditure, the "AI Capex narrative" continues and has not been broken.
b) CPU: The largest current fundamental base
Against the backdrop of a year-on-year decline in global PC industry shipments this quarter, AMD still achieved 22.5% growth this quarter (of which the price increase effect is about 10%), reflecting the continuous improvement of the company's competitiveness in the CPU field.
In terms of the overall CPU market share (including CPUs in the PC and server segments), AMD's market share has continued to rise in recent years, and in particular, AMD has overtaken Intel in the desktop CPU market.
With the rising importance of AI inference, the market has increased demand for server CPUs to solve latency and improve efficiency. Driven by "rising volume and price" of server CPUs this quarter, Dolphin Analyst estimates that the average selling price has increased by about 10-20% year on year. In the segmented server CPU market, AMD's market share has risen to more than 20%.
There is relatively little divergence in the market regarding server CPUs, and the company's management has also given favorable guidance. The company expects the year-on-year growth rate to exceed 80% in the second half of 2026, and the growth rate in 2027 will also exceed 70%, which is the guarantee for the company's high performance growth.
c) AI GPU Progress: MI455 will start shipping in the next quarter
The strong growth of server CPUs has long been the market consensus, while the ramp-up performance of the MI455X is the key to whether the company's valuation can shift from "story" to "reality". Whether it is Open AI, Meta, or the recent orders from Anthropic, they are all mainly procurement demands for computing power.
Compared with the MI355, the main change of AMD in the MI455X series is that it can provide the Helios rackmount platform. This enables the company to deliver from "single chip" to "rack-level cluster", directly targeting NVIDIA's Rubin architecture.
The previous "weak performance" of AMD's MI series cards was mainly because the company could not provide "cluster deployment" solutions. The "Helios rackmount platform" is exactly what large CSPs need, which has also allowed the company to successively obtain large orders from Open AI, Meta, Anthropic and other customers (clearly stated as 14GW).
Previously, the company has received 6GW orders from Open AI and Meta respectively, and recently announced cooperation with Anthropic (2GW) and Microsoft (GW not disclosed), which makes the market begin to believe that AMD's MI455X is expected to become a "game-changer" in the AI computing power market.
Compared with the previous quarter, Dolphin Analyst raised its performance expectations for the company, mainly because the company has obtained more orders from major CSPs, and the company's data center business is expected to continue to grow rapidly. The company has now received orders from Open AI, Meta, Anthropic and Microsoft, which also indicates that the market has anticipated and recognized the MI455X/Helios products in the second half of the year.
At present, server CPUs have entered a boom cycle, bringing "real" performance boost to the company (with little market divergence). As for AI GPUs, they are the most anticipated part of the company, as well as the key to the company's high performance growth and valuation improvement, and the market is also focused on the ramp-up performance of MI455X/Helios.
Most of AMD's valuation comes from expectations for the future. In fact, the communication on the post-earnings conference call is "more important" than the performance itself.
However, the company's management did not give a "more positive" outlook: on the one hand, several major customers have already been priced into market expectations, and the company did not announce new major customers this time; on the other hand, the company's future outlook did not exceed market expectations, especially when the MI455 is about to ship in the next quarter, the quarter-on-quarter growth only increased slightly, and there was no clear upward revision of the full-year AI GPU guidance.
The company's current valuation is significantly higher than that of NVIDIA, which mainly includes the market's expectation that the company can seize market share and achieve high growth in the AI computing power field. Even if the company has obtained orders from many large CSPs, it ultimately needs to "land" to see "real" performance contributions. The company's management's outlook after this earnings report did not give the market enough confidence.
Only when the company announces more large CSP orders and gives clearer and more positive guidance can the market be convinced of the competitiveness of the MI455X/Helios. Since there is obvious divergence in the market about the MI455X, this earnings report undoubtedly increases the "uncertainty" of the MI455X's competitiveness, which will also "discount" the company's high valuation.
The following is the detailed analysis
I. Overall Performance: Accelerated Growth
1.1 Revenue Side
AMD posted revenue of USD 11.54 billion in Q2 2026, up 50% year on year, slightly beating market expectations (around USD 11.3 billion). The year-on-year growth of the company's revenue this quarter is mainly driven by the doubling growth of the data center business.
Server CPUs continue to provide growth momentum. Dolphin Analyst estimates that AI GPU revenue reached USD 2.7 billion this quarter, and the quarter-on-quarter growth also began to accelerate, mainly driven by the demand for the MI355X series.
1.2 Gross Profit Side
AMD achieved gross profit of USD 6.2 billion in Q2 2026, up 103% year on year. The GAAP gross margin this quarter is 53.8%. In the same period last year, there was an impairment impact of around USD 800 million due to China regulatory factors. Excluding this impact, the gross margin increased by about 3.5 percentage points year on year, which mainly benefits from the rising proportion of high gross margin businesses such as server CPUs.
The company's non-GAAP gross margin guidance for the next quarter is 56%, basically flat quarter on quarter. Although the gross margin is driven by the growth of server CPUs, the MI455X will start shipping from the next quarter, and the early stage of mass production will have a certain dilution effect on the company's gross margin.