AMD's Data Center Revenue Doubles to $6.7B, but Gaming Slumps

AMD's latest earnings report shows a company transformed by the AI boom. Data center revenue more than doubled year-over-year to $6.7 billion, up from $3.2 billion in the same period last year, and up from $5.8 billion in the previous quarter. The segment now represents a whopping 58% of the company's total revenue, which hit a record $11.5 billion—a 50% increase year-over-year.

This growth is fueled by what CEO Lisa Su describes as "AI driving a significant expansion in demand for compute across all of our markets." The company expects the trend to continue, with Su predicting data center segment revenue to "more than double year-over-year in 2027" as well. AMD's leadership portfolio, including its MI300 series accelerators, appears to be gaining traction against competitors, capitalizing on the insatiable appetite for AI compute capacity.

Gaming Takes a Hit

Not everything is rosy. Gaming revenue fell 31% compared to last year, down to $779 million. The decline is attributed to price hikes and component shortages that have slowed sales of consoles like the Xbox Series X/S, PS5, and Valve's Steam Deck. Su noted that "gaming graphics revenue also declined year-over-year, as higher industry-wide component costs contributed to higher graphics card prices and weighed on overall demand."

For developers, this divergence is worth watching. The gaming slump suggests that consumer hardware costs are a drag on the gaming ecosystem, potentially affecting the installed base of machines that run new titles. Meanwhile, the data center surge indicates where the real investment is flowing—into AI infrastructure that increasingly shapes the tools developers use.

The overall PC business showed some resilience, with client revenue up 23% thanks to Ryzen processor sales, but the story is clearly about AMD's pivot toward AI-focused silicon. For a company once known primarily for gaming and PC chips, the balance sheet now tells a very different tale.