AMD has a record quarter as AI demand soars and gaming sales fall 40%

AMD just had its biggest quarter ever, and AI did most of the work. Revenue hit a record $13.4 billion. Sales to data centers nearly doubled, while the gaming business shrank by 40 percent. The split shows where the money in chips is moving.

What changed

Data centers are the large buildings full of computers that power cloud services and AI. AMD's data center sales rose 97 percent from a year earlier to a record $8.5 billion. AMD credits demand for its EPYC server chips and the launch of its Instinct MI450 series, which are chips built for AI work.

The business also kept more of each sale. Its operating margin, the share of sales left after running costs, rose from 25 percent to 34 percent. Operating income jumped 168 percent to $2.88 billion.

Why gaming fell

Gaming revenue dropped 40 percent to $773 million. This segment covers custom chips AMD makes for other companies' game consoles, plus its own Radeon graphics cards. CEO Lisa Su said the drop was mainly due to lower console chip sales, "as expected at this stage of the console cycle."

One confusing detail: Ryzen processors, which many gaming PCs use, are counted in a different segment called client. AMD also does not say how the gaming drop splits between console chips and graphics cards.

The rest of the business

• Client, which covers PC chips, brought in $2.95 billion, up 7 percent, led by Ryzen mobile chips.
• Embedded, which covers chips built into other hardware, reached $1.1 billion, up 29 percent.
• AMD pointed to aerospace and defense, automotive, communications and industrial customers for the embedded growth.

What happens next

AMD's finance chief, Jean Hu, expects about $17 billion next quarter, plus or minus 3 percent. That would be roughly 66 percent growth from a year earlier, mostly from data centers. Intel has guided to $15 billion to $16 billion. If both land there, AMD would pass Intel in revenue for the first time.

AMD also previewed new hardware. The Threadripper Halo Station, a desktop system that can run very large AI models locally, is due sometime in 2027, with no price yet. Windows systems on its Ryzen AI Halo platform are "coming soon." Su said AMD began shipping its MI455X chip in volume, and customers including Anthropic, Meta, Microsoft, OpenAI and Oracle have brought first server racks online.

What it means for buyers

The results show chipmakers putting their focus and growth into AI. That could shape the prices and choices you see for PCs, game consoles and cloud services. The report does not say how any prices will change. AMD ties the gaming drop to the late stage of the console cycle.