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AMD's Gaming Revenues Set to Decelerate: What Lies Ahead in 2026?
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Key Takeaways
AMD's Q1 gaming revenues rose 11% Y/Y to $720M, driven by strong Radeon 9000 series sales.
AMD expects gaming revenues in H2 2026 to be more than 20% below H1 amid market pressures.
AMD faces gaming competition as NVIDIA grows edge revenue and Intel launches Arc G-Series chips.
Advanced Micro Devices (AMD - Free Report) is witnessing mixed conditions in its gaming business. In the first quarter of 2026, gaming revenues grew 11% year over year to $720 million. The increase was mainly driven by strong sales of the company's new Radeon 9000 series graphics cards, which helped offset weaker performance in other gaming-related areas.
However, revenues dropped 15% sequentially, reflecting the expected softness in the market.
AMD’s semi-custom business, which makes chips for gaming consoles, saw revenues decline from the year-ago period, as expected, given the late stage of the current console cycle. Although customer demand for next-generation console platforms remains encouraging, sales of existing gaming consoles continue to be affected as these platforms mature.
AMD expects second-quarter 2026 total revenues to increase 9% sequentially, driven by double-digit growth in both Data Center and the Embedded segments and modest growth in the Client and Gaming segments. On a year-over-year basis, total revenues are expected to jump 46%. The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $11.27 billion, suggesting 46.6% growth from the figure reported in the year-ago quarter. The consensus mark for 2026 revenues is pegged at $48.69 billion, indicating 40.5% growth from 2025.
AMD expects the gaming market to remain under pressure in the second half of 2026. The company said that rising memory and other component costs are making gaming products more expensive, similar to trends in the PC market. As a result, consumers may cut back on spending, which could hurt demand for gaming hardware and related products.
The company is adopting a cautious approach toward its gaming business in the second half of 2026. Notably, AMD is planning conservatively, given the current market environment. AMD expects gaming revenues in the second half of the year to be more than 20% lower than in the first half of 2026. Gaming revenues had already declined 15% sequentially in the first quarter, highlighting the continued slowdown in gaming demand.
Tough Competition Hurts AMD’s Prospects
AMD’s prospects suffer from stiff competition from the likes of NVIDIA (NVDA - Free Report) and Intel (INTC - Free Report) . Both NVIDIA and Intel are expanding their footprints in the gaming space.
NVIDIA’s Edge Computing market platform, which encompasses devices such as PCs, gaming consoles and workstations, generated $6.4 billion in revenues for the fiscal first quarter of 2027. This represents a 10% quarter-over-quarter increase and a 29% rise year over year. This robust growth highlights the continued demand for NVIDIA’s products in the gaming and edge device markets.
Intel’s expanding portfolio has been noteworthy. In May 2026, Intel announced the launch of Intel Arc G-Series processors, a new family of handheld gaming processors built on the Intel Core Ultra Series 3 (Panther Lake) architecture. The processors are designed to deliver higher gaming performance, improved power efficiency and longer battery life for next-generation handheld gaming devices. Intel highlighted upcoming systems from partners, including Acer, MSI and OneXPlayer.
AMD shares have jumped 128.1% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 13.2%.
AMD Stock’s Price Performance
Image Source: Zacks Investment Research
AMD stock is overvalued, with a forward 12-month price/sales of 13.69X compared with the broader sector’s 6.39X. AMD has a Value Score of F.
AMD Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $1.60 per share, unchanged over the past 30 days, suggesting 233.3% year-over-year growth.
View the Zacks #1 Rank List
Image: Bigstock
AMD's Gaming Revenues Set to Decelerate: What Lies Ahead in 2026?
Key Takeaways
Advanced Micro Devices (AMD - Free Report) is witnessing mixed conditions in its gaming business. In the first quarter of 2026, gaming revenues grew 11% year over year to $720 million. The increase was mainly driven by strong sales of the company's new Radeon 9000 series graphics cards, which helped offset weaker performance in other gaming-related areas.
However, revenues dropped 15% sequentially, reflecting the expected softness in the market.
AMD’s semi-custom business, which makes chips for gaming consoles, saw revenues decline from the year-ago period, as expected, given the late stage of the current console cycle. Although customer demand for next-generation console platforms remains encouraging, sales of existing gaming consoles continue to be affected as these platforms mature.
AMD expects second-quarter 2026 total revenues to increase 9% sequentially, driven by double-digit growth in both Data Center and the Embedded segments and modest growth in the Client and Gaming segments. On a year-over-year basis, total revenues are expected to jump 46%. The Zacks Consensus Estimate for second-quarter 2026 revenues is pegged at $11.27 billion, suggesting 46.6% growth from the figure reported in the year-ago quarter. The consensus mark for 2026 revenues is pegged at $48.69 billion, indicating 40.5% growth from 2025.
AMD expects the gaming market to remain under pressure in the second half of 2026. The company said that rising memory and other component costs are making gaming products more expensive, similar to trends in the PC market. As a result, consumers may cut back on spending, which could hurt demand for gaming hardware and related products.
The company is adopting a cautious approach toward its gaming business in the second half of 2026. Notably, AMD is planning conservatively, given the current market environment. AMD expects gaming revenues in the second half of the year to be more than 20% lower than in the first half of 2026. Gaming revenues had already declined 15% sequentially in the first quarter, highlighting the continued slowdown in gaming demand.
Tough Competition Hurts AMD’s Prospects
AMD’s prospects suffer from stiff competition from the likes of NVIDIA (NVDA - Free Report) and Intel (INTC - Free Report) . Both NVIDIA and Intel are expanding their footprints in the gaming space.
NVIDIA’s Edge Computing market platform, which encompasses devices such as PCs, gaming consoles and workstations, generated $6.4 billion in revenues for the fiscal first quarter of 2027. This represents a 10% quarter-over-quarter increase and a 29% rise year over year. This robust growth highlights the continued demand for NVIDIA’s products in the gaming and edge device markets.
Intel’s expanding portfolio has been noteworthy. In May 2026, Intel announced the launch of Intel Arc G-Series processors, a new family of handheld gaming processors built on the Intel Core Ultra Series 3 (Panther Lake) architecture. The processors are designed to deliver higher gaming performance, improved power efficiency and longer battery life for next-generation handheld gaming devices. Intel highlighted upcoming systems from partners, including Acer, MSI and OneXPlayer.
AMD’s Share Price Performance, Valuation & Estimates
AMD shares have jumped 128.1% year to date, outperforming the broader Zacks Computer and Technology sector’s rise of 13.2%.
AMD Stock’s Price Performance
Image Source: Zacks Investment Research
AMD stock is overvalued, with a forward 12-month price/sales of 13.69X compared with the broader sector’s 6.39X. AMD has a Value Score of F.
AMD Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for second-quarter 2026 earnings is pegged at $1.60 per share, unchanged over the past 30 days, suggesting 233.3% year-over-year growth.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
AMD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.