AMD's revenue climbs 50% and data center sales doubled, but the stock is down

Advanced Micro Devices reported second-quarter earnings on Tuesday that beat expectations, but the stock slumped in extended trading after rising during regular trading hours.

Here's how the chipmaker did versus LSEG consensus estimates for the quarter ended June 27:

Overall, AMD revenue climbed 50% from $7.69 billion a year ago, a sign of the company's central position in the market for artificial intelligence chips.

AMD's Data Center unit is what is driving the company's growth. Data Center sales were $6.7 billion, up 107% on an annual basis, which the company attributed to central processing unit and graphics processing unit sales.

The chipmaker's stock has nearly tripled over the past year, both on optimism that its AI chips, branded Instinct, will take a meaningful amount of a growing market from Nvidia , as well as the resurgence of the CPU — which AMD sells under the brand name Epyc — which AI experts now say is an essential component for running agents.

AMD said it expects about $13 billion in revenue for the current quarter, plus or minus $300 million, versus LSEG expectations of $12.52 billion. Some analysts had been looking for guidance as high as $14 billion.

In July, AMD raised its expectations for the size of the semiconductor industry, saying it could be worth $2 trillion per year by 2028. The chipmaker sees $1.4 trillion of that coming from AI accelerators, or GPUs, up from a previous estimate of $500 billion by 2028.

The company will also start shipping Helios, its first rack AI system, this quarter to companies like Meta , OpenAI , and Oracle . It's AMD's first rack-scale system, using its CPUs, GPUs, and networking chips, which directly competes with Nvidia's complete systems, not just its chips. AMD said on Tuesday that it expected Helios shipments to ramp up in the fourth quarter.