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Advanced Micro Devices (AMD) will report second-quarter earnings tomorrow, Aug. 4. Similar to Q1, the company is likely to deliver a solid quarter driven by robust AI-driven growth. As enterprises continue investing heavily in AI infrastructure, demand across AMD's data center portfolio will remain a key catalyst for the company.
Despite this optimism, investor sentiment toward semiconductor and AI stocks has cooled in recent weeks. Profit-taking after a significant rally, along with concerns over elevated valuations, has weighed on the sector, including AMD shares.
However, most analysts covering AMD stock maintain a bullish outlook. AI adoption continues to accelerate, driving demand for AI accelerators and high-performance CPUs that manage and support increasingly complex AI workloads.
With multiple AI growth drivers, expanding data center momentum, and strong enterprise demand, AMD remains well positioned to deliver solid growth. That makes its upcoming Q2 earnings report an important catalyst that could boost AMD stock.
AMD Poised to Deliver Another Quarter of Strong Growth
AMD appears well positioned to extend its impressive growth streak in the second quarter as demand for AI infrastructure and data center processors continues to accelerate. Strong adoption of its EPYC server CPUs and Instinct AI accelerators is expected to drive another quarter of robust revenue. Meanwhile, improved product mix and higher average selling price will support solid earnings growth.
AMD delivered an impressive first quarter, with revenue rising 38% year-over-year (YoY) to a record level while remaining essentially flat sequentially. The momentum in its business is expected to accelerate in the second quarter. AMD’s management is forecasting revenue of $11.2 billion in Q2, representing 9% sequential growth and 46% YoY growth.
The data center business could once deliver robust growth. Demand for EPYC processors continues to strengthen across both hyperscale cloud providers and enterprise customers, while Instinct GPUs are benefiting from rapidly expanding AI deployments.
Server CPU revenue is expected to increase by more than 70% YoY in the second quarter. Growth should remain robust through the second half of 2026 and into 2027 as AMD ramps production of its next-generation EPYC processors.
Meanwhile, the company's AI accelerator business is also poised for significant expansion. Revenue from Instinct GPUs is expected to grow at a strong double-digit rate as adoption accelerates across cloud providers, enterprises, sovereign AI projects, and supercomputing customers.
A key catalyst is the shift from pilot programs to large-scale production deployments. AMD is seeing increasing demand for AI inference workloads, where the high memory capacity and bandwidth of its Instinct accelerators provide a competitive advantage. This is leading to more in-depth customer relationships, including large, multi-generation infrastructure deployments.
Strong product demand and an improved mix should also support profitability. AMD expects an adjusted gross margin of 56% in the second quarter, reflecting both sequential and YoY expansion.
Wall Street analysts expect AMD to report adjusted EPS of $1.35 for the quarter, a significant increase from $0.48 per share in the same period last year, highlighting the company's accelerating earnings power.
The Bottom Line
With AI infrastructure investment continuing to rise and demand for servers remaining strong, AMD looks well-positioned to deliver another solid quarter. Growth in its EPYC server processors, faster adoption of Instinct AI GPUs, and improving profit margins all point to accelerating revenue and earnings growth.
Although valuation concerns and recent weakness across the semiconductor sector have weighed on investor sentiment, AMD's long-term outlook remains compelling. The company is expected to deliver strong growth in both revenue and earnings over the next three to five years, supported by its expanding presence in AI and data center markets.
Wall Street analysts currently rate AMD stock a consensus “Strong Buy.” The average price target of $579.68 suggests roughly 19% upside from current levels.
