AMD Faces Investor Backlash as Data Center Growth Falls Short

Advanced Micro Devices (AMD) experienced a significant 9% drop in share prices this Wednesday. The decline followed the company's announcement of a mere 14% year-over-year growth in data center revenue for the second quarter, a figure that starkly missed investor expectations.

Despite showcasing strong overall earnings and achieving record sales across several segments, the slowdown in data center growth has sparked concerns regarding AMD's competitive edge in the rapidly evolving AI market.

Financial Performance Highlights

AMD reported its data center revenue at $3.2 billion, up from $2.8 billion the previous year. However, the segment encountered an operating loss of $155 million, a stark contrast to the $932 million income recorded in the same period of 2024.

CEO Lisa Su's Optimistic Outlook

In a recent CNBC interview, AMD CEO Lisa Su remained optimistic about the data center segment's future, stating, "Data center business is doing extremely well." She further added, "We see actually an inflection point in that revenue as we go into the third quarter." Despite her confidence, AMD's stock price fell to $158.59 per share by 10:47 am ET.