In US Stock Market News, Advanced Micro Devices (AMD) is projected to reach a major revenue milestone as its data center segment passes 70% of total revenue in 2027, according to analysis based on company guidance and growth trajectories. The shift reflects accelerating demand for AI computing infrastructure, with management expecting data center revenue to more than double year-over-year in 2027 as Helios systems ramp for major cloud customers. This represents Stock Market News Today that signals AMD's strategic pivot toward infrastructure-driven growth.
In the second quarter of 2025, data center products generated 58% of AMD's revenue—$6.7 billion of the chipmaker's record $11.5 billion total, compared to approximately 42% a year earlier. Data center revenue climbed 107% from a year earlier, while all other AMD segments (client processors, gaming chips, and embedded products) grew about 8% combined. Third-quarter guidance implies the segment reaches roughly 63% of sales if the rest of the company holds steady, with CFO Jean Hu noting management expects data center sales to accelerate in the second half of the year.
AMD Data Center Growth Accelerates on AI Demand
Data center, home to EPYC server processors and Instinct graphics processing units (GPUs) for artificial intelligence computing, generated about $3.2 billion in the second quarter of a year earlier and reached $6.7 billion last quarter—more than doubling over the year. Management's third-quarter revenue guidance calls for approximately $13 billion in total revenue, representing about 41% growth. If everything outside data center simply holds near $4.8 billion combined, data center would land around $8.2 billion in the third quarter, representing about 63% of revenue.
Helios Ramp Timeline and Customer Deployments
Helios, AMD's rack-scale AI system built on MI400 series chips, is in production with initial shipments on track to begin late in the third quarter, according to CEO Lisa Su on the company's second-quarter earnings call. OpenAI has agreed to deploy 6 gigawatts of AMD GPUs, with the first gigawatt of MI450 series chips set to begin deploying later this year. Meta Platforms signed its own 6-gigawatt agreement with first shipments on the same timeline. Anthropic plans up to 2 gigawatts, with the first gigawatt beginning in the first half of 2027.
Path to 70% Data Center Revenue Mix
For the segment to reach 70% of revenue, it must grow to about 2.3 times the size of everything else AMD sells. Last quarter, it was about 1.4 times that size. Running current growth rates forward a year—with data center slowing from 107% to 90% and the rest still growing about 8%—by the second quarter of 2027, the segment would produce roughly $12.8 billion against about $5.2 billion for everything else, equaling about 71% of revenue. Management is aiming higher than this conservative scenario, with CEO Lisa Su stating: "Taken together, we now expect data center segment revenue to more than double year-over-year in 2027."
Risks to the Projection
The likeliest way this prediction fails is not through data center weakness but strength in other segments. Client revenue grew 23% in the latest quarter, a healthy rate that could accelerate with a PC upgrade cycle. Gaming revenue fell 31% in the latest quarter and may soon be too small for its declines to mask stronger client growth. If client growth reaches toward 30% while gaming stabilizes, the rest of the company could grow about 20%, lifting the data center mix near 69% of revenue by mid-2027—just under the 70% threshold. However, a Helios shipment slip that cuts data center growth in half to about 50% could push the 70% crossover into 2028.
Market Valuation and Pricing
The stock trades at about $474 as of the article date, or around 30 times what AMD is expected to earn in 2027. The valuation appears reasonable next to 41% guided revenue growth, though a smooth Helios ramp is already baked into the price. Investors are effectively pricing AMD as a data center company, with the Stock Market News reflecting expectations for sustained AI infrastructure demand.
FAQ
What did AMD report regarding data center revenue growth in the second quarter of 2025?
Data center products generated 58% of AMD's revenue in the second quarter of 2025—$6.7 billion of the chipmaker's record $11.5 billion total revenue. This represents 107% year-over-year growth in data center revenue compared to approximately 42% of revenue a year earlier.
Why does AMD expect data center revenue to more than double in 2027?
AMD management expects data center revenue to more than double year-over-year in 2027 due to the ramp of Helios, the company's rack-scale AI system built on MI400 series chips, coupled with major customer deployments from OpenAI (6 gigawatts), Meta Platforms (6 gigawatts), and Anthropic (up to 2 gigawatts). Initial Helios shipments are on track to begin late in the third quarter, with ramping continuing through the fourth quarter and into 2027.
What is the main today stock market news for AMD regarding its business mix?
The main today stock market news for AMD is that its data center segment is expected to reach 70% of total revenue at some point in 2027 before the Helios ramp is finished. This represents a dramatic shift in business mix, with data center growing 107% year-over-year in the latest quarter compared to 8% combined growth in all other segments, reflecting AMD's transformation into a data center and AI-focused company.
