What Changed In AMD’s Story?
Advanced Micro Devices (AMD) has stopped leading with the problem that opened its call a year ago. That problem was keeping one of its accelerators out of China. The latest call was fiscal Q2 2026. This time, management did not lead with the subject at all. So what was AMD leading with back then?
What Was AMD Leading With A Year Ago?
Export controls. In the fiscal Q2 2025 call, management said that “U.S. export restrictions effectively eliminated MI308 sales to China.” Higher EPYC and Ryzen processor sales more than offset the hit, management said.
That mattered because Instinct accelerators sit inside the data center business. It is AMD’s biggest. Data center revenue reached $16.6 billion in fiscal 2025.
In the latest call, the subject appeared in a much smaller role. Management said the year-earlier quarter carried roughly $800 million of inventory and related charges. Those charges came from the export restrictions. Management said the year-over-year comparisons exclude them.
What Is AMD Leading With Now?
Whole racks of AI hardware, sold to a few very large customers. Management said its rack-scale platform, Helios, is in production. AMD also announced a new partnership with one of those customers. That customer will deploy MI450 series GPUs in those racks at gigawatt scale.
The first deployment starts in the first half of 2027. Meanwhile, the business behind those racks has taken over the results. Data center revenue grew 107% year over year in fiscal Q2 2026.
It reached a record $6.7 billion in that quarter. That is 58% of what the company sold in the quarter. The client and gaming business, which covers PC and console chips, grew 6% year over year. Its revenue came to $3.8 billion.
So the part of AMD that export controls once held back now leads on both size and growth. That shift is also what you are paying for. The stock trades at 117 times its earnings over the last twelve months.
The S&P 500 trades at 22.6 times. So does the new story protect you, or expose you?
Should AMD Holders Be Reassured Or Concerned?
Reassured about the business, and for a plain reason. Export controls faded from the opening remarks. Meanwhile, the business they had hit more than doubled year over year. The risk did not go away, but it stopped setting the results.
What should concern you is the price of that improvement. The stock has returned 296% over the past twelve months. The S&P 500 returned 17.9%. At that price, a slower ramp has little room to hide.
This stock also falls harder than the index when sentiment turns. AMD dropped 63% in the 2022 inflation and rate shock. The S&P 500 fell 24%.
One statement on the next call is the one to watch. Management now expects data center segment revenue to more than double year over year in 2027. If the next call repeats that, and export controls stay an adjustment to old numbers, the quiet was earned.
Then holders can stay reassured. If that 2027 target softens, or export controls return to the opening, the reassurance goes with it.
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