Advanced Micro Devices (AMD) is set to report second-quarter earnings after the market closes on Tuesday, with Wall Street expecting adjusted earnings of $1.61 per share on revenue of $11.31 billion. The report comes amid a pivotal moment for the chipmaker, which has seen its stock surge more than 120% in 2026, far outpacing rival Nvidia's (NVDA) roughly 10% gain during the same period.
The earnings release will test whether AMD's data center business, which now accounts for more than half of total revenue, can sustain its rapid growth and justify a premium valuation. The company guided for approximately $11.2 billion in second-quarter revenue, implying year-over-year growth of about 46%, an acceleration from the first quarter's 38% increase. Adjusted gross margin is expected to reach about 56%, up one percentage point sequentially.
AMD's data center segment has become the primary growth engine, with first-quarter revenue of $5.8 billion, up 57% year over year. This segment now represents 56.3% of total revenue, compared with just 24.2% three years ago. The company's EPYC server processors and Instinct AI accelerators have driven this expansion, with CEO Lisa Su noting that customer forecasts for the upcoming MI450 Series and Helios rack-scale platform are running ahead of internal projections.
The acceleration shows up clearly across AMD's last four reported quarters and the Street's estimate for the quarter about to be announced, compiled from the company's own investor-relations filings:
Year-over-year Data Center growth has widened in each of the last four reported quarters — 14%, 22%, 39% and 57% — according to AMD's SEC filings. The 2Q26E bar reflects the Wall Street consensus cited above rather than a reported figure, since Tuesday's release had not yet occurred at publication time.
However, the stakes are high. AMD shares trade at approximately 54 times forward earnings estimates, well above the company's historical average of 32.3 times. According to TipRanks, options pricing implies an expected post-earnings move of plus or minus 12.4%, slightly higher than the average 8% one-day move following the past eight earnings reports. The range of those moves has been wide, from 1.76% to 18.61%, with the two most recent reports producing swings of 18.61% and 17.31%.
Wall Street analysts remain bullish, with a Strong Buy consensus rating based on 28 Buys and six Holds. The average 12-month price target of $589.72 implies about 21.7% upside from current levels. But some analysts caution that the valuation leaves little room for error. As one Motley Fool analysis noted, "To justify a price near 54 times forward earnings estimates, AMD's profits would need to keep compounding at a rapid pace for years, not quarters."
The key metric to watch will be data center revenue, which analysts estimate at $6.5 billion for the second quarter. A beat on this figure, combined with strong gross margins and optimistic third-quarter guidance, could push the stock toward $526.73. Conversely, a miss on data center revenue, weaker margins, or cautious forward guidance could pressure shares toward $442.03.
The scattered price levels and probability signals discussed above can be summarized as follows:
AMD's growth story is unfolding against a backdrop of intense competition with Nvidia, which reported fiscal first-quarter revenue of $81.6 billion, up 85% year over year, with data center revenue of $75.2 billion, up 92%. Nvidia also posted a 72% net income margin for the quarter ended April 26, compared with AMD's 14% for its fiscal first quarter. The revenue gap between the two companies has widened over time, with Nvidia's dominance in AI accelerators becoming more pronounced.
Set side by side, the scale gap between the two companies' data center businesses is stark:
† Nvidia's data center share is calculated from the reported data center and total revenue figures above; AMD's Q2 2026 figures are Wall Street estimates and company guidance issued ahead of Tuesday's report.
Nvidia's scale is further bolstered by its recent partnership with the Japanese government to launch a national infrastructure factory, and its push for open-weight AI models, which CEO Jensen Huang argues will expand the total addressable market for AI computing. Huang has noted that roughly one in four AI tokens generated today come from open models, and he wants that share to grow, which would increase demand for Nvidia's chips.
Meanwhile, AMD is positioning itself as a leader in inference and agentic AI, areas where its chiplet design and high-core-count CPUs offer advantages. The company projects the AI accelerator market will reach $1.4 trillion by 2030, while the server CPU market is expected to top $200 billion, more than 50% growth over the same period. Microsoft has named AMD's Helios as its upcoming rack-scale AI infrastructure, alongside Nvidia's Vera Rubin, signaling growing adoption.
Legendary investor Stanley Druckenmiller has maintained a significant position in Taiwan Semiconductor Manufacturing (TSM), the primary chip supplier for both Nvidia and AMD, despite trimming his stake in the first quarter. The Duquesne Family Office's holding was worth $167 million at quarter-end, making it the third-largest position in the portfolio. Druckenmiller's continued investment reflects confidence in sustained AI-driven chip demand, even as he rotates into other tech names like Intel, Sandisk, and Broadcom.
TSMC's second-quarter results, which showed revenue climbing nearly 34% year over year, underscore the strength of the AI supply chain. High-performance computing, including AI accelerators, now accounts for 66% of TSMC's total revenue. The company projects third-quarter revenue of about $45 billion, implying another 12% sequential gain, and full-year growth exceeding 40% in U.S. dollars.
For AMD, the immediate focus is on whether data center growth can continue to accelerate. The company has exceeded revenue estimates in each of the past eight quarters and topped earnings expectations in seven. Its track record of beating expectations has led analysts to raise sales and profit targets over 30 times in the past three months, but this also raises the bar for Tuesday's report.
As one analyst noted, the third-quarter guidance may matter as much as the reported quarter itself. "A company that told investors to expect 46% growth needs its next forecast to hold the pace," the Motley Fool analysis said. "Any step-down in the implied growth rate could weigh on the stock more than the reported numbers do."
AMD's stock has shown resilience recently, climbing ahead of the earnings report. The relative strength index sits at 46.37, indicating neutral momentum, with key resistance at $561.50. The company's strong financial position, with quarterly cash flow tripling to $2.6 billion, provides a cushion, but the market's high expectations mean the reaction could be sharp in either direction.
Investors will be listening closely to management's comments on MI450 production, customer orders, and the competitive landscape against Nvidia. With the AI infrastructure boom showing no signs of slowing, AMD's ability to capitalize on its data center momentum will be crucial in determining whether its premium valuation is justified.
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