AMD Stock Falls 9% Despite Data Center Revenue Doubling to $6.7 Billion

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Advanced Micro Devices shares fell about 9% in after-hours trading despite reporting second-quarter revenue that rose 50% year over year to a record $11.5 billion, with data center revenue more than doubling to $6.7 billion. The decline followed management's third-quarter outlook for about $13 billion in revenue and a flat adjusted gross margin of about 56%, while capital spending nearly tripled from a year ago to $808 million. The data center segment, driven by EPYC server processors and Instinct AI accelerators, swung to $2.1 billion in operating income from a small loss a year earlier, and non-GAAP earnings per share reached $1.66, up 82% year over year. However, the flat margin guidance and rising capital expenditures raised concerns about the cost of growth, especially as the company begins shipping its new Helios rack-scale systems to customers including Meta Platforms, OpenAI, and Oracle. At about $473 per share, AMD trades at roughly 43 times forward earnings estimates, compared to about 21 times for rival Nvidia.

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