Prediction: Data Center Passes 70% of AMD&x27;s Revenue in 2027, Before the Helios Ramp Is Finished Daniel Sparks, The Motley FoolMon, September 7, 2026 at 2:46 AM UTC 0 Image source: AMD.Key Points Data center generated 58% of AMD&x27;s revenue in the second quarter, versus about 42% a year earlier. Thirdquarter guidance implies the segment reaches roughly 63% of sales if the rest of the company holds steady. Management expects data center revenue to more than double in 2027 as Helios systems ramp for OpenAI, Meta and Anthropic.
Prediction: Data Center Passes 70% of AMD's Revenue in 2027, Before the Helios Ramp Is Finished
Daniel Sparks, The Motley FoolMon, September 7, 2026 at 2:46 AM UTC
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Image source: AMD.Key Points -
Data center generated 58% of AMD's revenue in the second quarter, versus about 42% a year earlier.
Third-quarter guidance implies the segment reaches roughly 63% of sales if the rest of the company holds steady.
Management expects data center revenue to more than double in 2027 as Helios systems ramp for OpenAI, Meta and Anthropic.
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In the second quarter of 2025, data center products generated about 42% of Advanced Micro Devices'(NASDAQ:AMD) revenue. Last quarter, they generated 58% -- $6.7 billion of the chipmaker's record $11.5 billion total.
Behind that shift is a simple growth gap. In the second quarter, data center revenue climbed 107% from a year earlier. Everything else AMD sells (client processors, gaming chips and embedded products) grew about 8% combined.
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With a gap that wide, the mix shifts every quarter on its own.
My prediction: the segment passes 70% of AMD's revenue at some point in 2027, before the Helios rack ramp is finished. Here's the math, step by step, and what could break it.
A widening spread
The second quarter's 50% companywide growth blended two very different businesses. Data center, home to EPYC server processors and the Instinct graphics processing units (GPUs) behind artificial intelligence (AI) computing, more than doubled over the year, from about $3.2 billion to $6.7 billion. The rest of the company combined for about $4.8 billion. Client revenue, at $3.1 billion, was up 23%, embedded grew 19%, and gaming fell 31%.
Third-quarter guidance widens the gap. Management's guide calls for revenue near $13 billion in the third quarter -- about 41% growth, down from the second quarter's 50%. But chief financial officer Jean Hu said the company expects data center sales to accelerate in the second half of the year. In other words, nearly every incremental dollar in that guide is a data center dollar.
If everything outside data center simply holds near $4.8 billion combined, data center lands around $8.2 billion in the third quarter. That would be about 63% of revenue, five percentage points of mix shift in one quarter.
What does it take to get to 70%?
For the segment to reach 70% of revenue, it has to grow to about 2.3 times the size of everything else AMD sells. Last quarter, it was about 1.4 times that size.
Run those two rates forward a year, with data center slowing from 107% to 90% and the rest still growing about 8%.
By the second quarter of 2027, the segment would be producing roughly $12.8 billion against about $5.2 billion for everything else. That comes to about 71% of revenue. And even a sharper slowdown to about 85% growth still gets there within a year.
Management is aiming higher than my scenario assumes. "Taken together, we now expect data center segment revenue to more than double year-over-year in 2027," CEO Lisa Su said on the company's second-quarter earnings call.
Helios, AMD's rack-scale AI system built on MI400 series chips, is in production, and Su said initial shipments are on track to begin late this quarter, with the ramp building through the fourth quarter and into 2027.
OpenAI has agreed to deploy 6 gigawatts of AMD GPUs, with the first gigawatt of MI450 series chips set to begin deploying later this year. Meta Platforms signed its own 6-gigawatt agreement, with first shipments on the same timeline. And Anthropic plans up to 2 gigawatts, with the first gigawatt beginning in the first half of 2027.
AMD's other businesses could get in the way
The likeliest way this prediction fails isn't a data center stumble -- it's strength everywhere else.
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Client revenue grew 23% in the latest quarter, a healthy rate hidden inside that combined 8% figure because gaming fell 31% alongside it. And at about $780 million a quarter, gaming may soon be too small for its declines to keep masking that.
A PC upgrade cycle could push client growth toward 30% while gaming stops falling, lifting the rest of the company to about 20% growth. Hold data center at 90%, and the segment sits near 69% of revenue by mid-2027, just under the line.
Of course, that outcome would be good for AMD. It would likely push the crossover out a quarter or two, still inside 2027.
But a Helios stumble is what breaks the prediction outright. If shipments slip and data center growth gets cut in half to about 50%, the segment could sit around 66% of revenue in mid-2027, and I think 70% waits until 2028.
Ultimately, the spread between 107% and 8% is wide enough that the prediction doesn't need a best-case 2027. It survives a real data center slowdown, and a client revival mostly delays it.
Investors, I'd argue, are already pricing AMD like a data center company. The stock trades at about $474 as of this writing, or around 30 times what AMD is expected to earn in 2027.
The valuation looks reasonable next to 41% guided revenue growth, but a smooth Helios ramp is already baked into the price.
I expect the crossover to come around the middle of 2027, give or take a quarter.
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Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.
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Prediction: Data Center Passes 70% of AMD&x27;s Revenue in 2027, Before the Helios Ramp Is Finished Daniel Sparks, The Motle...
