AMD shares fall 7% after earnings as quarterly capex more than doubles to $808 million

AMD shares fell more than 7% in after hours trading Tuesday after the chipmaker reported record second quarter revenue while capital expenditures increased sharply from the previous quarter.

AMD spent $808 million on property and equipment during the quarter, up from $389 million in the first quarter and $282 million a year earlier. Capital expenditures reached $1.2 billion during the first six months of 2026, compared with $494 million during the same period last year.

Free cash flow declined to $1.56 billion from $2.57 billion in the first quarter, though it remained above the $1.18 billion reported a year earlier. Operating cash flow from continuing operations totaled $2.37 billion, down from $2.96 billion in the previous quarter and up from $1.46 billion last year.

AMD reported record revenue of $11.54 billion, up 50% from $7.69 billion a year earlier and 13% from the first quarter.

Adjusted earnings reached $1.66 per share, compared with $0.48 a year earlier. Adjusted net income rose 253% to $2.76 billion, while adjusted operating income increased to $3.09 billion from $897 million.

On a GAAP basis, AMD reported net income of $2.3 billion, or $1.38 per diluted share, compared with $872 million, or $0.54 per share, during the same quarter last year.

Data center revenue more than doubled to $6.72 billion from $3.24 billion a year earlier, supported by demand for AMD EPYC processors and Instinct accelerators. The segment represented 58% of AMD’s total quarterly revenue and generated operating income of $2.1 billion.

Client and gaming revenue increased 6% to $3.84 billion. Client revenue rose 23% to $3.06 billion, while gaming revenue declined 31% to $779 million due to lower semi custom revenue.

Embedded revenue increased 19% to $977 million and generated operating income of $386 million.

AMD ended the quarter with $13.11 billion in cash, cash equivalents and short term investments, up from $12.35 billion in the first quarter. Total debt remained nearly unchanged at $3.23 billion.

For the third quarter, AMD expects revenue of approximately $13 billion, plus or minus $300 million. The midpoint represents growth of about 41% year over year and 13% sequentially. The company expects its adjusted gross margin to remain at approximately 56%.

CEO Lisa Su said AMD expects data center sales to accelerate during the second half as demand for EPYC processors increases and deployments of Instinct accelerators and the Helios rack scale platform expand.

AMD said Helios systems are being deployed by Anthropic, Meta, Microsoft, OpenAI, Oracle and other AI customers. The company also announced an agreement with Anthropic covering the deployment of up to two gigawatts of MI450 Series accelerators in Helios racks.