AMD reported after the close on August 4. The last available closing price of $518.58 predates the release, so the market’s verdict is not yet visible in closing data.

The quarter was excellent. Revenue of $11.5 billion rose 50% year over year and 13% sequentially, a sixth consecutive quarter above 30% growth. Gross margin expanded to 56%, up over 200 basis points. Operating income reached $3.1 billion at a 27% margin, and comparable diluted earnings per share grew roughly 82%, well ahead of revenue. Data centre revenue of $6.7 billion more than doubled to about 58% of the company, at a 31% segment margin, with EPYC up more than 70% and Instinct sales more than doubling.

The more consequential news was forward. Chief executive Lisa Su said AMD is “tracking materially ahead of the long-term financial model we shared at our Financial Analyst Day last November,” and then: “We now expect revenue to grow substantially above our prior target of greater than 35%, and we expect to significantly exceed our $20 annual EPS target within our strategic timeframe.”

That has commercial substance attached. Helios rack-scale systems using MI450 accelerators are in production, shipping from this quarter. Anthropic will deploy up to 2 gigawatts of MI450 in Helios, with the first gigawatt starting in the first half of 2027, alongside joint engineering work using Claude to accelerate ROCm development. Microsoft will run Helios at scale on Azure. OpenAI and Meta already have multi-generation gigawatt deployments. Revenue per gigawatt, per Su, remains “double-digit billions.” Management guides data centre revenue to more than double again in 2027.

It is not uniformly good. Gaming revenue fell 31% to $779 million, client and gaming segment margins compressed from 21% to 15%, and management is planning for a softer PC market in the second half as higher memory and component costs weigh on demand. That memory-cost pressure now appears across the sector, driving Amazon’s capex raise and Apple’s guided deceleration too.

So why Watchlist? Because the price largely reflects it. Annualising the quarter gives about 78 times, but that is the wrong frame for a business doubling its largest segment. On a 2027 estimate built from management’s own guidance, roughly $12 of earnings, the shares trade near 43 times. Probability-weighted fair value lands at $519, within a dollar of the last close.

A clean fourth-quarter Helios ramp with margins intact would justify a Buy, as would a retreat toward $455-475. The complete AMD report is on our Reports page.