Advanced Micro Devices reported solid but unspectacular second-quarter earnings results on Tuesday afternoon. Its shares were down sharply in after-hours trading. The stock had been up 7% during regular trading hours.

Revenue for the quarter reached $11.5 billion, above expectations of $11.3 billion, and up 50% on the year.

Adjusted earnings per share were $1.66, up from 48 cents last year, and just ahead of Wall Street's projection of $1.62. Last year, earnings were impacted by an $800 million charge for inventory that had been destined for Chinese sales that were canceled by shifting U.S. export control policy.

Adjusted operating income reached $3.1 billion, with a 27% operating margin, just above the Wall Street consensus estimate.

The company will offer more complete guidance during the earnings call, but AMD's outlook for third quarter revenue and adjusted gross margin in the earnings release edged expectations.

This is breaking news. Read a preview of AMD's earnings below and check back for more analysis soon.

Advanced Micro Devices reports its second-quarter earnings after the close Tuesday on the heels of a July rout of chip stocks that had corrected a fierce spring rally.

From March 30 to June 30 the stock was up 196%, and then declined 26% through July 29.

AMD still sells PC and gaming chips, but the name of the game in 2026 is the AI data center. The company has gone from $3.7 billion in data center sales in all of 2021 to a projected $6.5 billion just in the second quarter.

Overall, Wall Street analysts expect revenue of $11.3 billion, rising 47%, with an adjusted operating margin of 27%. Adjusted earnings per share are seen at $1.62, up from 48 cents a year ago.

The comparison is impacted by an $800 million charge last year for inventory that had been destined for Chinese sales that were canceled by shifting U.S. export control policy.

AMD had long been the second choice for CPU chips behind Intel, and the same for its GPUs, which trail Nvidia's chips. AMD's server CPUs are now considered better than Intel's by many, and the company claims to have a 40% market share, on the road to 50%.

By 2030, it expects this to be a $220 billion a year market, as there has been renewed interest in CPU servers this year as part of the complete AI data center picture. Its competitors -- Intel, Arm, Nvidia, and Amazon -- have also indicated skyrocketing demand this year.

At the beginning of the AI data center boom, AMD was way behind Nvidia, and it still is. But the company's recent Advancing AI conference showed off how far it had come in matching the Nvidia Vera Rubin AI server technologically. The new AMD Helios servers combine AMD GPUs, CPUs, and networking chips, supported by software that is maturing. This copies Nvidia's holistic approach of "extreme co-design" in the AI data center, and AMD is chipping away at its moat.

Helios will begin shipping to its first two big customers, Meta Platforms and OpenAI, by the end of the current quarter. Underlining AMD's second-place status, both of them received warrants for 160 million AMD shares, which vest in tranches as deliveries are made. Nvidia is the one getting shares of customers' stock in some of its deals, not the other way around.

If all shares vest, that would represent about 16% of AMD's diluted share count.

Microsoft, Oracle, and Anthropic have also agreed to buy Helios servers. There were no warrants issued as part of these deals.

Because of the Helios schedule, analysts are expecting a sales inflection in the fourth quarter into 2027. Next year, sales are expected to grow by 59% to $80 billion with earnings surging by more than 80% to $13.87.