Winners & losers: AMD's AI business is booming, but, as we all know, that's not good news for gamers. The company says rising memory and component prices will hit demand in the second half of 2026, with gaming revenue now expected to fall by more than 20% from the first half.
AMD's first-quarter results were good news for investors. Revenue hit $10.3 billion, up 38% year over year, while the data center segment climbed 57% to $5.8 billion on the back of Epyc CPUs and Instinct GPUs. Client and Gaming also improved, rising 23% to $3.6 billion, with gaming revenue up 11% to $720 million thanks to solid Radeon GPU demand.
But AMD's outlook wasn't so positive. The company said it is preparing for weaker PC shipments and a sharper pullback in gaming as memory and other component costs continue to climb. The shortage that has already made desktop builds more expensive is now threatening to further affect GPUs, laptops, and console hardware.
Data: App Economy Insights
AMD CFO Jean Hu said second-half gaming demand will be "impacted by higher component and memory cost," with revenue expected to decline "more than 20%" compared with the first half.
Lisa Su was similarly ominous, calling it a "tight memory environment" and saying AMD is seeing "cost increases on the memory side." The CEO added that the company has secured enough supply to meet its internal targets, especially for higher-margin AI and data center products, but the broader market is feeling the squeeze. When memory makers can sell HBM and advanced DRAM into AI servers at premium prices, consumer hardware inevitably moves down the priority list.
It's a particular problem for gaming. Radeon cards rely on GDDR memory, consoles use AMD semi-custom SoCs paired with large memory pools, and modern gaming laptops are already sensitive to bill-of-materials increases. Higher RAM and SSD prices also make new PC builds less attractive, even when GPU prices remain stable.
AMD's Radeon business had shown signs of life after several difficult quarters, helped by demand for its latest GPUs. Console demand may also be tested later this year as publishers and platform holders prepare for one of the busiest holiday periods in recent memory, thanks partly to the launch of GTA VI.