Top News

• Morningstar said AMD's second-quarter results reinforced its AI thesis, citing 107% data center revenue growth and the upcoming Helios launch.
• The firm said Helios shipments are tracking ahead of AMD's initial expectations, while AI GPU growth awaits the platform's ramp later this year.
• AMD CEO Lisa Su said 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.

Advanced Micro Devices Inc. (AMD) is in focus on Wednesday after its second-quarter results, with Morningstar saying the chipmaker's server CPU business is poised for another year of rapid growth.

The research 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%.

AMD shares were down more than 8% in Wednesday’s pre-market trade. AMD was among the top trending tickers on Stocktwits at the time of writing.

Morningstar Sees AMD’s AI Momentum Building

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.

It added 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.

The research firm also said AMD continues to benefit from tight supply, noting the company is effectively selling everything it can produce.

Despite investor expectations for an even stronger quarter, Morningstar believes AMD's AI growth rates could ultimately prove conservative as Helios and future AI rack systems reach customers.

Lisa Su Says AI Infrastructure Market Is 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, while 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’s Q2 At A Glance

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.

What Retail Traders Think About AMD

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%.

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