AMD’s datacenter business is booming while gaming takes a backseat
The Verge Stevie Bonifield ● Covered by 2 sources
AMD's data center revenue more than doubled again, hitting $6.7 billion last quarter. Gaming sales dropped 31 percent as pricier GPUs and console shortages bit hard.
Based on reporting by The Verge, Stevie Bonifield — read the original for the full story.
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AMD just posted another blowout quarter for its data center business, and the numbers tell a clear story about where the company's priorities sit right now. Data center revenue hit $6.7 billion, up from $5.8 billion the previous quarter and a jump of 107 percent from the $3.2 billion AMD reported a year earlier. CEO Lisa Su told analysts on Tuesday's earnings call that she expects that segment to more than double year-over-year again in 2027, which suggests AMD sees no slowdown coming in AI-driven compute demand anytime soon.
Gaming told a different story entirely. Revenue there fell 31 percent year-over-year to $779 million, and Su pointed to rising component costs across the industry as a key culprit. Those costs pushed graphics card prices higher, which in turn cooled demand. Add in the well-documented struggles around Xbox Series X/S, PS5, and Steam Deck sales — price hikes and shortages have dogged all three — and the gaming segment looks like the odd one out in an otherwise strong quarter.
CFO Jean Hu framed the overall picture plainly: total revenue climbed 50 percent year-over-year to a record $11.5 billion, and data center alone now accounts for 58 percent of everything AMD brings in. That's a remarkable share for a business that, not too long ago, would have been overshadowed by client and gaming numbers. Speaking of which, AMD's broader PC and gaming business actually grew 6 percent overall, with Client revenue up 23 percent on the back of Ryzen processor sales. So it's not that PCs are struggling — it's specifically the graphics and console side dragging things down.
Su's language on the call leaned heavily into the AI narrative, describing demand for compute expanding "across all of our markets" and positioning AMD's portfolio to capture that opportunity for years to come. It's the kind of framing every chipmaker is using these days, but the data center numbers back it up in AMD's case. Whether gaming recovers once component costs ease is a separate question entirely, and one AMD didn't really address on this call.
My take — AI-written commentary, not fact-checked reporting
Nobody should be surprised that AI compute is eating every other business line alive at this point, but the speed of it at AMD is still striking — data center now makes up well over half the company's revenue. What's more interesting is watching gaming get treated like the neglected sibling while component shortages and price hikes do the damage; that's an industry-wide problem, not just an AMD one, and it's going to keep squeezing anyone trying to sell a graphics card or console in this environment.
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