Advanced Micro Devices Inc. (AMD) reported second-quarter results on Wednesday, with Morningstar projecting the chipmaker's server CPU business to grow more than 70% in 2027 driven by AI infrastructure demand. The research firm cited 107% year-over-year data center revenue growth and upcoming Helios rack-scale platform shipments tracking ahead of AMD's initial expectations. AMD CEO Lisa Su stated that as AI moves into production across a broader range of applications and workloads, demand for both accelerators and CPUs is growing well above prior expectations. Morningstar expects AMD's overall data center business to grow more than 100% and noted the company continues to benefit from tight supply, effectively selling everything it can produce. AMD shares were down more than 8% in Wednesday's pre-market trade following the earnings release.
Morningstar Projects AMD Server CPU Business to Grow More Than 70% in 2027
Morningstar said AMD's Q2 results reinforced its long-term AI thesis, citing 107% year-over-year data center revenue growth and the upcoming Helios rack-scale platform. The research firm stated that Helios shipments are tracking ahead of AMD's initial expectations, while the AI GPU business is at a temporary lull before the platform ramps later this year. Morningstar also noted AMD continues to benefit from tight supply, with the company effectively selling everything it can produce. The firm expects AMD's server CPU business to grow more than 70% in 2027, driven by AI infrastructure demand, while projecting the company's overall data center business to grow more than 100%.
Lisa Su Says AI Infrastructure Market Expanding Faster Than Expected
During the post-earnings call, AMD CEO Lisa Su said AI infrastructure demand continues to outpace the company's earlier expectations. "The overall data center market opportunity is expanding far more rapidly than we projected just six months ago," Su said, adding that as AI moves into production across a broader range of applications and workloads, demand for both accelerators and CPUs is growing well above AMD's prior expectations. AMD now expects the data center AI accelerator market to grow more than 45% annually to roughly $1.4 trillion by 2030, while forecasting the server CPU market to expand more than 50% annually to approximately $220 billion over the same period. Su said the larger addressable market, combined with AMD's product portfolio and customer visibility, is creating "a steeper growth trajectory" for the company's data center business. She also pointed to strong demand for AMD's next-generation Helios AI platform, saying that the customer pull for Helios is "very strong" and tracking ahead of the company's initial forecasts.
AMD Reports Q2 EPS of $1.66 on Revenue of $11.54 Billion
AMD reported earnings per share (EPS) of $1.66 on revenue of $11.54 billion in Q2, compared to Wall Street expectations of an EPS of $1.61 per share on revenue of $11.3 billion, according to Fiscal.ai data. AMD's Data Center revenue more than doubled to $6.7 billion, driven by demand for EPYC server processors and Instinct AI GPUs. The chipmaker's capital expenditure rose to $808 million during the quarter from $282 million a year ago.
Retail Sentiment on AMD Trends Extremely Bullish on Stocktwits
Retail sentiment on Stocktwits around AMD trended in the 'extremely bullish' territory, with message volumes at 'extremely high' levels at the time of writing. AMD stock is up 142% year-to-date and 193% over the past 12 months. The S&P 500 ETF (SPY) is up 22% over the past 12 months, while the Invesco QQQ Trust ETF (QQQ) is up 28%. The VanEck Semiconductor ETF (SMH) is up 98% during this period, while the iShares Semiconductor ETF (SOXX) is up 126%.
FAQ
What did Morningstar project for AMD's server CPU business in 2027?
Morningstar projected AMD's server CPU business to grow more than 70% in 2027, driven by AI infrastructure demand, while expecting the company's overall data center business to grow more than 100%.
What did Lisa Su say about AI infrastructure demand?
Lisa Su stated that the overall data center market opportunity is expanding far more rapidly than AMD projected just six months ago, and that demand for both accelerators and CPUs is growing well above prior expectations as AI moves into production across a broader range of applications and workloads.
What were AMD's Q2 financial results?
AMD reported earnings per share of $1.66 on revenue of $11.54 billion in Q2, exceeding Wall Street expectations of $1.61 EPS on $11.3 billion revenue. Data Center revenue more than doubled to $6.7 billion.
