The yardstick for measuring AMD's growth has shifted from PC and gaming console semiconductors to data centers. In the second-quarter earnings released on August 4, 2026, total company revenue reached a record $11.536 billion, up 50% year-over-year and up 13% sequentially. Data Center accounted for 58% of that total, while Gaming's share fell to about 6.8%. Data Center revenue was 2.9 times Gaming revenue in the same quarter a year earlier; over the past year, that gap has widened to 8.6 times.
However, the 31% year-over-year decline in Gaming should not be read as evidence of consecutive quarterly revenue declines. On a sequential basis, revenue actually rose about 8%, as the prior-year rebound effect from semi-custom SoCs for gaming consoles and rising graphics card prices pulled the numbers down through different channels. Separating the year-over-year and sequential comparisons reveals that the 31% decline reflects the payback from a strong prior-year semi-custom performance, not a sharp drop from the most recent quarter.
$6.718 Billion Accounts for 58% of Total Revenue
Data Center revenue reached $6.718 billion, up 107% year-over-year and up 16% sequentially. AMD attributes this to strong demand for EPYC server CPUs and expanded shipments of Instinct GPUs. This is an increase of $943 million from Q1 2026's $5.775 billion, marking the second consecutive quarter in which the segment accounted for more than half of total company revenue.
The change on the profitability side is also significant. The Data Center segment's operating income reached $2.103 billion, with an operating margin of 31%. In the same quarter a year earlier, the segment posted an operating loss of $155 million and a margin of negative 5%, showing that revenue growth has translated directly into a business that drives overall company profit.
That said, the same quarter a year earlier included $800 million in inventory and related charges tied to Instinct MI308, stemming from U.S. export restrictions on China. Part of the improvement in operating income/loss reflects the disappearance of this one-time factor. When comparing normal business profitability, the 107% revenue growth and 31% margin should be weighed carefully, and the swing from the prior year's loss should not be treated simply as an improvement in earning power.
On the product side, AMD announced the Helios rack-scale system, the Instinct MI450 series, and 6th Gen EPYC in the period between the end of Q2 and the earnings release. Large-scale deployment plans with Microsoft and Anthropic are also progressing, and the company expects Data Center revenue growth to accelerate in the second half of 2026. This quarter's $6.718 billion is not a forward-looking expectation based on future plans, but an achievement already delivered through shipments of EPYC and current-generation Instinct products.
Down 31% Year-over-Year, Up 8% Sequentially
Gaming revenue came in at $779 million, down 31% from $1.122 billion in the same quarter a year earlier. AMD cites the decline in semi-custom revenue as the primary cause. Semi-custom includes SoCs for gaming consoles, and in Q2 2025, Gaming revenue had grown 73% on the back of increases in semi-custom sales and Radeon GPU demand. This time, that high prior-year base worked in the opposite direction.
Meanwhile, Q1 2026 Gaming revenue was $720 million. Q2 revenue rose by $59 million from that, an increase of about 8%. The 31% decline is accurate when compared to the same quarter a year earlier, but it does not mean Gaming revenue has been sharply declining at the same rate from the most recent quarter.
Even within Gaming, the cause is not singular. CEO Lisa Su explained during the earnings call that industry-wide rising component costs pushed up graphics card prices, squeezing demand for gaming graphics. The decline in semi-custom affects console SoCs, while rising prices affect Radeon cards. AMD has not disclosed the revenue impact of each factor separately, so the entire 31% decline cannot be attributed solely to either the console product cycle or rising PC component costs.
Client's 23% Growth and the Decline in Combined Margin
Client revenue reached $3.062 billion, up 23% year-over-year. Growth in demand for Ryzen processors offset Gaming's $343 million decline, resulting in combined Client and Gaming segment revenue of $3.841 billion, up 6%. The contraction in Gaming did not drag down AMD's overall PC-related business because Client's growth exceeded it.
Revenue and profit did not move in the same direction. The segment's operating income was $582 million, down 24%, and the operating margin fell from 21% in the same quarter a year earlier to 15%. AMD explains that increased operating expenses outweighed the effect of higher revenue. Client's growth supported the segment's revenue, but it was not enough to offset the decline in margin.
While Su maintained her outlook that the Client market will contract in the second half of 2026, she expressed optimism about the first-half results and the contribution from AI PCs. Ryzen PRO revenue reportedly grew more than 50% year-over-year. Whether AI PCs can fully offset the anticipated market contraction in the second half remains uncertain, but thanks to Ryzen PRO's growth, Client's revenue increase is not dependent solely on consumer CPUs.
What Underpins the $13 Billion Outlook?
AMD forecasts Q3 revenue of approximately $13 billion, plus or minus $300 million. At the midpoint, this represents an increase of about 41% year-over-year and about 13% sequentially, with non-GAAP gross margin expected at approximately 56%. CFO Jean Hu explained that strong double-digit growth in Data Center will drive the overall company, while Client and Gaming is expected to see a modest decline. The assumption is that a large double-digit decline in Gaming will outweigh a modest increase in Client.
In Q2, Gaming revenue fell by $343 million year-over-year, while Data Center revenue rose by $3.478 billion. Data Center alone generated 58% of total company revenue, and the segment's operating income of $2.103 billion far exceeded Client and Gaming's $582 million. Achieving the $13 billion outlook will require Data Center to continue growing through expanded EPYC and Instinct shipments, outpacing the modest decline expected in Client and Gaming.