AMD expects 20% decline in gaming revenue from 'higher memory and component costs' in the second half of the year — CEO Lisa Su warns of further memory crunch
The memory squeeze hits the balance sheet.
AMD announced its financial results for the first quarter of 2026 on Tuesday, noting record revenue in the data center while warning of a further memory crunch on the consumer side. AMD says it's bracing for impact in the second half of the year, noting the headwinds of component pricing and "planning the business accordingly," says AMD CEO Lisa Su.
Breaking down segment financials, Su said that AMD expects demand to drop off in the second half of the year in both its client and gaming businesses due to "higher memory and component costs." That's the sentiment we've heard echoed from executives at Micron and SK Hynix, among at least half a dozen others. AMD says it's bracing for quite the significant impact to its consumer business in the second half of the year, however.
"We expect second half demand in gaming to be impacted by higher component and memory cost," said AMD's Jean Hu, executive vice president and Chief Financial Officer at AMD. "We now expect second half gaming revenue to decline by more than 20% compared to the first half."
There are a couple of caveats to that quote. First, AMD broadly splits up its business into enterprise, client and gaming, and embedded segments. Here, Hu is talking specifically about gaming revenue — GPUs and consoles — and AMD later noted that consumer demand is partly offset by commercial demand for Ryzen laptops across the entire client segment.
Still, gaming demand is important, especially given the state of console prices. Last year, Microsoft increased the price of its Xbox Series consoles twice. In March, Sony announced price hikes across all new PS5 models. And just days ago, Sony increased the price of refurbished PlayStation 5 Slim consoles by $100. The drop in gaming revenue could be a response to these price increases, or they could be a sign that further price hikes are on the way; there's no way to tell without knowing how many consoles Microsoft and Sony are shipping.
Although consumers will feel even more of the memory squeeze in the second half of the year, AMD won't. The company says it expects data center CPU revenue to increase 70% year-over-year in the second quarter on the back of increased AI demand. That's certainly possible, as just last month, Intel hit a record-high stock price due to increased CPU demand.
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Jake Roach is the Senior CPU Analyst at Tom’s Hardware, writing reviews, news, and features about the latest consumer and workstation processors.
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ezst036 Probably somewhat to be expected. Still for AMD their gaming revenue bar might be down, but their AI/enterprise revenue bar is up.Reply
https://www.illinoisloyalty.com/attachments/1743048037031-gif.40911/ -
acadia11 Not just up , way up. They’ll continue to have record quarters. This just gives the industry the excuse to forget about consumer or charge exorbitant prices.Reply -
80251 The good news for consumer computing just never seems to stop...Reply
Did AMD's stock value increase when they made this announcement? -
vinay2070 Reply
Everything that affects a consumer makes the companies shares go higher. Inclding AI job loses. Its a bit effed up.80251 said:
Did AMD's stock value increase when they made this announcement? -
JamesJones44 I'm a little surprised we haven't heard the wall st. drumbeat to spin off the "less profitable" and "significantly smaller" gaming divisions at AMD and Nvidia yet. However, I bet it's coming, they have it up a lot of other companies in recent years.Reply -
Kindaian Report from 2067: "In the golden days, there was amazing games with hyper-realistic 3d environments. After the plague of 2025/6, all games become examples of pixel art. There is no way for emulate the past as now everything runs in the cloud."Reply -
usertests Reply
Unfortunately for the hyperbolic fantasies, popular lightweight 3D games like Counter-Strike, GTA V, Skyrim, etc. will run on integrated graphics... from 5-10 years ago.Kindaian said:Report from 2067: "In the golden days, there was amazing games with hyper-realistic 3d environments. After the plague of 2025/6, all games become examples of pixel art. There is no way for emulate the past as now everything runs in the cloud." -
Shiznizzle Reply
Not even the 714 dollar/525 pounds dead end platform and last gen 5800X3D's is going to help much with their financials.JamesJones44 said:I'm a little surprised we haven't heard the wall st. drumbeat to spin off the "less profitable" and "significantly smaller" gaming divisions at AMD and Nvidia yet. However, I bet it's coming, they have it up a lot of other companies in recent years.
The % of revenue AMD gets from home user/gamer's is significant enough to affect the bottom line, so this is gonna sting when the bean counters post the numbers. That number almost equaled the data center sales % not that long ago.
At least according to Toms when i read that figure a few months ago. They are the ones that posted the financials on which i am relying to support the above mentioned claims.
Home computing/gamers buying AMD are not some insignificant number.
Unless AI pick up the slack, earnings are going to decrease. Wont matter much in the grand scheme of things. AMD sold out to the US government so is in receipt of US government handouts now as well.
I dont think there will be a Zen 7 anything for me because i think i will be pushed to the more "affordable" Intel at that point. -
JamesJones44 Reply
Gaming revenue for AMD's 2026 Q1 quarter was 720 million out of a total of 10.3 BILLION. That's 7% of total revenue, that's nothing in the public world. Profit wise, AMD does not break out gaming specifically, but margins on "client and gaming" are only 16%, that's peanuts compared to the 30% margin on data center.Shiznizzle said:At least according to Toms when i read that figure a few months ago. They are the ones that posted the financials on which i am relying to support the above mentioned claims.
The info is all publicly available on AMD's website
https://ir.amd.com/news-events/press-releases/detail/1284/amd-reports-first-quarter-2026-financial-results