The statements in this report include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and beliefs and involve numerous risks and uncertainties that could cause actual results to differ materially from expectations. These forward-looking statements speak only as of the date hereof or as of the dates indicated in the statements and should not be relied upon as predictions of future events, as we cannot assure you that the events or circumstances reflected in these statements will be achieved or will occur. You can identify forward-looking statements by the use of forward-looking terminology including “believes,” “expects,” “may,” “will,” “should,” “seeks,” “intends,” “plans,” “pro forma,” “estimates,” “anticipates,” or the negative of these words and phrases, other variations of these words and phrases or comparable terminology. The forward-looking statements relate to, among other things: possible impact of future accounting rules on AMD’s condensed consolidated financial statements; demand for AMD’s products; AMD’s strategy and expected benefits; the growth, change and competitive landscape of the markets in which AMD participates; the expectation that international sales will continue to be a significant portion of total sales in the foreseeable future; the expectation that AMD’s cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and our commercial paper program will be sufficient to fund AMD’s operations, capital expenditures, commitments and strategic activities over the next 12 months and beyond; AMD’s ability to access capital markets; AMD’s expectation that based on management’s current knowledge, the potential liability related to AMD’s current litigation will not have a material adverse effect on its financial positions, results of operations or cash flows; anticipated ongoing and increased costs related to enhancing and implementing information security controls; the expectation that revenue allocated to remaining performance obligations that are unsatisfied will be recognized in the next 12 months; that a small number of customers will continue to account for a substantial part of AMD’s revenue and receivables in the future; the expected implications from the development of the legal and regulatory environment relating to emerging technologies, such as AI; AMD’s expectation to utilize the cloud service capacity in its operations or assign the capacity; AMD’s ability to achieve its corporate responsibility initiatives; compliance costs associated with new or developing sustainability laws and requirements; expected future AI technology trends, developments and growth; the expected benefits of AMD’s acquisitions; the extent of impact of export restrictions imposed by the U.S. on our business; expected shipment of the Helios rack-scale platforms; expected gain on the transfer of appreciated assets related to the acquisition of ZT Group Int’l, Inc.; AMD’s future investment commitments and commencement of future payments under data center leases; and AMD’s expectation to fund stock repurchases through cash generated from operations. For a discussion of the factors that could cause actual results to differ materially from the forward-looking statements, see “Part II, Item 1A—Risk Factors” and the “Financial Condition” section set forth in “Part I, Item 2-Management’s Discussion and Analysis of Financial Condition and Results of Operations,” or MD&A, and such other risks and uncertainties as set forth below in this report or detailed in our other Securities and Exchange Commission (SEC) reports and filings. We assume no obligation to update forward-looking statements. References in this Quarterly Report on Form 10-Q to “AMD,” “we,” “us,” “management,” “our” or the “Company” mean Advanced Micro Devices, Inc. and our consolidated subsidiaries. AMD, the AMD Arrow logo, AMD Instinct, EPYC, Radeon, Ryzen, Xilinx and combinations thereof are trademarks of Advanced Micro Devices, Inc. Other names are for informational purposes only and are used to identify companies and products and may be trademarks of their respective owners. “Zen” is a codename for an AMD architecture and is not a product name. The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this report and our audited consolidated financial statements and related notes as of December 27, 2025 and December 28, 2024, and for each of the three years for the period ended December 27, 2025 as filed in our Annual Report on Form 10-K for the fiscal year ended December 27, 2025. 22 Table of Contents Overview and Recent Developments We are a global semiconductor company primarily offering: •Artificial Intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), AI Network Interface Cards (AI NICs), Field Programmable Gate Arrays (FPGAs) and adaptive System-on-Chip (SoC) products for data centers; •CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, semi-custom SoC products and development services; and •embedded CPUs, APUs, FPGAs, System on Modules (SOMs), and adaptive SoC products. From time to time, we may also sell or license portions of our intellectual property (IP) portfolio. In this section, we will describe the general financial condition and the results of operations of Advanced Micro Devices, Inc. and its wholly-owned subsidiaries (collectively, “we”, “us,” “our”, “AMD” or the “Company”), including a discussion of our results of operations for the three and six months ended June 27, 2026 compared to the prior year period and an analysis of changes in our financial condition. Net revenue for the three months ended June 27, 2026 was $11.5 billion, a 50% increase compared to the prior year period. The increase in net revenue was driven by an increase in Data Center segment revenue primarily driven by strong demand for our AMD EPYC™ processors and AMD Instinct™ MI350 Series GPUs, an increase in Client and Gaming segment revenue, primarily driven by strong demand for our AMD Ryzen™ processors and an increase in Embedded segment revenue as demand strengthened across end markets. Gross margin for the three months ended June 27, 2026 was 54% compared to gross margin of 40% for the prior year period, a 14% increase primarily driven by the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period and a favorable product mix, including higher Data Center segment revenue. Operating income for the three months ended June 27, 2026 was $2.0 billion compared to operating loss of $134 million for the prior year period. The increase in operating income was due to higher gross profit, partially offset by higher operating expenses. Net income for the three months ended June 27, 2026 was $2.3 billion compared to net income of $872 million for the prior year period. The increase in net income was primarily driven by higher operating income. As of June 27, 2026, our cash, cash equivalents and short-term investments were $13.1 billion compared to $10.6 billion as of December 27, 2025. During the six months ended June 27, 2026, we generated $5.3 billion of cash from operating activities and we returned $221 million to stockholders through the repurchase of common stock under our stock repurchase program (Repurchase Program). In October 2025 and February 2026, we entered into multi-year agreements with OpenAI OpCo, LLC (OpenAI) and Meta Platforms, Inc. (Meta), respectively, under which each customer intends to deploy up to 6 gigawatts of AMD data center GPUs, with the first gigawatt of each deployment powered by our AMD Instinct MI450 series products. In connection with these agreements, we issued each customer a warrant to purchase up to 160 million shares of our common stock at an exercise price of $0.01 per share, vesting in tranches tied to AMD Instinct GPU purchase milestones and specified AMD stock price and/or performance conditions. As of June 27, 2026, no warrant tranches had vested or become exercisable, and the warrants had no impact on our results for the three and six months ended June 27, 2026. We intend the discussion of our financial condition and results of operations that follows to provide information that will assist in understanding our financial statements, the changes in certain key items in those financial statements from period to period, the primary factors that resulted in those changes, and how certain accounting principles, policies and estimates affect our financial statements. 23 Table of Contents Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). The preparation of our financial statements requires us to make estimates and judgments that affect the reported amounts in our consolidated financial statements. We evaluate our estimates on an ongoing basis, including those related to our revenue, inventories, goodwill, long-lived and intangible assets, business combination accounting and income taxes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Although actual results have historically been reasonably consistent with management’s expectations, the actual results may differ from these estimates or our estimates may be affected by different assumptions or conditions. There have been no significant changes for the three and six months ended June 27, 2026 to the items that we disclosed as our critical accounting estimates in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section of our Annual Report on Form 10-K for the fiscal year ended December 27, 2025. Results of Continuing Operations Each of the Client and Gaming businesses do not qualify as a separate reportable operating segment, however, we continue to separately disclose revenues for each business. Our operating results tend to vary seasonally. Historically, our net revenue has been generally higher in the second half of the year than in the first half of the year, although market conditions and product transitions could impact this trend. The following table provides a summary of net revenue and operating income (loss) by segment: Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 (In millions) Net revenue: Data Center $ 6,718 $ 3,240 $ 12,493 $ 6,914 Client and Gaming Client 3,062 2,499 5,947 4,793 Gaming 779 1,122 1,499 1,769 Total Client and Gaming 3,841 3,621 7,446 6,562 Embedded 977 824 1,850 1,647 Total net revenue $ 11,536 $ 7,685 $ 21,789 $ 15,123 Cost of sales and operating expenses: Data Center $ 4,615 $ 3,395 $ 8,791 $ 6,137 Client and Gaming 3,259 2,854 6,289 5,299 Embedded 591 549 1,126 1,044 All other 1,081 1,021 2,117 1,971 Total cost of sales and operating expenses $ 9,546 $ 7,819 $ 18,323 $ 14,451 Operating income (loss): Data Center $ 2,103 $ (155) $ 3,702 $ 777 Client and Gaming 582 767 1,157 1,263 Embedded 386 275 724 603 All other (1,081) (1,021) (2,117) (1,971) Total operating income (loss) $ 1,990 $ (134) $ 3,466 $ 672 24 Table of Contents Data Center Data Center net revenue of $6.7 billion for the three months ended June 27, 2026 increased by 107%, compared to net revenue of $3.2 billion for the prior year period. Data Center net revenue of $12.5 billion for the six months ended June 27, 2026 increased by 81%, compared to net revenue of $6.9 billion for the prior year period. The increase in both periods was primarily driven by strong demand for our AMD EPYC processors and AMD Instinct MI350 Series GPUs. Data Center operating income was $2.1 billion for the three months ended June 27, 2026, compared to operating loss of $155 million for the prior year period. Data Center operating income was $3.7 billion for the six months ended June 27, 2026, compared to operating income of $777 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue and the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period, partially offset by higher cost of sales and operating expenses. Client and Gaming Client and Gaming net revenue of $3.8 billion for the three months ended June 27, 2026 increased by 6%, compared to net revenue of $3.6 billion for the prior year period. Client and Gaming net revenue of $7.4 billion for the six months ended June 27, 2026 increased by 13%, compared to net revenue of $6.6 billion for the prior year period. Client net revenue of $3.1 billion for the three months ended June 27, 2026 increased by 23% compared to net revenue of $2.5 billion for the prior year period, primarily driven by a 34% increase in unit shipments of client processors, partially offset by a 6% decrease in average selling price of client processors. Client net revenue of $5.9 billion for the six months ended June 27, 2026 increased by 24% compared to net revenue of $4.8 billion for the prior year period, primarily driven by a 29% increase in unit shipments of client processors, partially offset by a 3% decrease in average selling price of client processors. The increase in unit shipments in both periods was primarily driven by AMD Ryzen mobile processors and the decrease in average selling price in both periods was primarily due to a shift in mix of Ryzen processor sales, including lower AMD Ryzen desktop processors sales. Gaming net revenue of $779 million for the three months ended June 27, 2026 decreased by 31% compared to net revenue of $1.1 billion for the prior year period, primarily due to lower semi-custom revenue. Gaming net revenue of $1.5 billion for the six months ended June 27, 2026 decreased by 15% compared to net revenue of $1.8 billion for the prior year period, primarily due to lower semi-custom revenue, partially offset by higher sales of our RadeonTM GPUs. Client and Gaming operating income was $582 million for the three months ended June 27, 2026, compared to operating income of $767 million for the prior year period. Client and Gaming operating income was $1.2 billion for the six months ended June 27, 2026, compared to operating income of $1.3 billion for the prior year period. The decrease in operating income in both periods was primarily due to higher operating expenses. Embedded Embedded net revenue of $977 million for the three months ended June 27, 2026 increased by 19%, compared to net revenue of $824 million for the prior year period. Embedded net revenue of $1.9 billion for the six months ended June 27, 2026 increased by 12%, compared to net revenue of $1.6 billion for the prior year period. Net revenue increased in both periods as demand strengthened across end markets. Embedded operating income was $386 million for the three months ended June 27, 2026, compared to operating income of $275 million for the prior year period. Embedded operating income was $724 million for the six months ended June 27, 2026, compared to operating income of $603 million for the prior year period. The increase in operating income in both periods was primarily driven by higher revenue, partially offset by higher cost of sales and operating expenses. 25 Table of Contents All Other All Other operating loss of $1.1 billion for the three months ended June 27, 2026 primarily consisted of $544 million of amortization of acquisition-related intangibles and $503 million of stock-based compensation expense. All Other operating loss of $1.0 billion for the three months ended June 28, 2025 primarily consisted of $568 million of amortization of acquisition-related intangibles and $369 million of stock-based compensation expense. All Other operating loss of $2.1 billion for the six months ended June 27, 2026 primarily consisted of $1.1 billion of amortization of acquisition-related intangibles and $990 million of stock-based compensation expense. All Other operating loss of $2.0 billion for the six months ended June 28, 2025 primarily consisted of $1.1 billion of amortization of acquisition-related intangibles and $733 million of stock-based compensation expense. International Sales International sales, based on billing location of customers who purchased directly from us, were 70% and 71% of net revenue for the three months ended June 27, 2026 and June 28, 2025, respectively, and 72% and 69% of net revenue for the six months ended June 27, 2026 and June 28, 2025, respectively. We expect that international sales will continue to be a significant portion of total sales in the foreseeable future. Substantially all of our sales transactions were denominated in U.S. dollars. Gross Margin and Expenses The following is a summary of certain consolidated statement of operations data for the periods indicated: Three Months Ended Six Months Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 In millions, except percentages Net revenue $ 11,536 $ 7,685 $ 21,789 $ 15,123 Cost of sales 5,073 4,366 9,649 7,817 Amortization of acquisition-related intangibles 260 260 521 511 Gross profit 6,203 3,059 11,619 6,795 Gross margin 54 % 40 % 53 % 45 % Research and development 2,528 1,894 4,925 3,622 Marketing, general and administrative 1,401 991 2,654 1,877 Amortization of acquisition-related intangibles 284 308 574 624 Interest expense (37) (38) (74) (58) Other income (expense), net 598 98 763 137 Income tax provision (benefit) 252 (834) 490 (711) Income (loss) from discontinued operations, net of tax (8) 104 3 104 Gross Margin Gross margin was 54% and 40% for the three months ended June 27, 2026 and June 28, 2025, respectively. Gross margin was 53% and 45% for the six months ended June 27, 2026 and June 28, 2025, respectively. The increase in both periods was driven by the absence of inventory and related charges associated with the U.S. government export control on AMD Instinct MI308 Data Center GPU products that was recorded in the prior year period and a favorable product mix, including higher Data Center segment revenue. 26 Table of Contents Expenses Research and Development (R&D) Expenses R&D expenses of $2.5 billion for the three months ended June 27, 2026 increased by $0.6 billion, or 33%, compared to $1.9 billion for the prior year period. R&D expenses of $4.9 billion for the six months ended June 27, 2026 increased by $1.3 billion, or 36%, compared to $3.6 billion for the prior year period. The increase in both periods was primarily due to higher employee-related costs from an increase in headcount in support of our continued focus on our AI strategy and long-term growth opportunities. Marketing, General and Administrative (MG&A) Expenses MG&A expenses of $1.4 billion for the three months ended June 27, 2026 increased by $0.4 billion, or 41%, compared to $1.0 billion for the prior year period. MG&A expenses of $2.7 billion for the six months ended June 27, 2026 increased by $0.8 billion, or 41%, compared to $1.9 billion for the prior year period. The increase in both periods was primarily due to an increase in go‑to‑market activities to support our revenue growth. Amortization of Acquisition-Related Intangibles Amortization of acquisition-related intangibles of $544 million for the three months ended June 27, 2026 decreased by $24 million, or 4%, compared to $568 million for the prior year period. Amortization of acquisition-related intangibles of $1,095 million for the six months ended June 27, 2026 decreased by $40 million, or 4%, compared to $1,135 million for the prior year period. The decrease in both periods was primarily due to certain acquisition-related intangibles that were fully amortized in the prior fiscal year. Interest Expense Interest expense for the three and six months ended June 27, 2026 was $37 million and $74 million, respectively. Interest expense for the three and six months ended June 28, 2025 was $38 million and $58 million, respectively. The decrease for the three month period was primarily due to the absence of commercial paper borrowings. The increase for the six month period was due to the issuance of $1.5 billion in aggregate principal amount of our 4.212% Senior Notes due 2026 (4.212% Notes) and 4.319% Senior Notes due 2028 (4.319% Notes) on March 24, 2025. Other Income (Expense), Net Other income (expense), net primarily consists of interest income, gains and losses from investments, and foreign currency transaction gains and losses. Other income (expense), net for the three months ended June 27, 2026 was $598 million, an increase of $500 million, or 510%, compared to $98 million for the prior year period. Other income (expense), net for the six months ended June 27, 2026 was $763 million, an increase of $626 million, or 457%, compared to $137 million for the prior year period. The increase in both periods was primarily driven by unrealized gains from the public market listing of non-marketable equity securities during the second quarter of fiscal year 2026. Income Taxes We determine income taxes for interim reporting periods by applying our estimated annual effective tax rate to the year-to-date results and adjusted for tax items discrete to each period. For the three and six months ended June 27, 2026, we recorded an income tax provision from continuing operations of $252 million and $490 million representing an effective tax rate of 9.8% and 11.8%, respectively. The difference between the U.S. federal statutory tax rate of 21% and our estimated annual effective tax rate was primarily due to the income tax benefit from foreign-derived deduction eligible income (FDDEI) and research and development (R&D) tax credits. 27 Table of Contents For the three and six months ended June 28, 2025, we recorded an income tax benefit from continuing operations of $834 million and $711 million representing an effective tax rate of 1,263.6% and (92.8)%, respectively. The tax benefit for the three and six months ended June 28, 2025 reflected a discrete tax benefit of $792 million and $781 million, respectively, primarily due to a tax benefit of $853 million related to the release of uncertain tax positions pertaining to the reasonable cause relief for dual consolidated losses approved by the Internal Revenue Service (IRS) in April 2025, partially offset by other items, including deferred tax expense associated with the expected gain on the transfer of appreciated assets related to the acquisition of ZT Group Int’l, Inc. (ZT Systems). Results of Discontinued Operations Net income (loss) from discontinued operations for the three and six months ended June 27, 2026 of $(8) million and $3 million included tax provision adjustments. FINANCIAL CONDITION Liquidity and Capital Resources As of June 27, 2026 and December 27, 2025, our cash, cash equivalents and short-term investments were $13.1 billion and $10.6 billion, respectively. Our operating, investing and financing activities for the six months ended June 27, 2026 compared to the prior year period are as described below: Six Months Ended June 27, 2026 June 28, 2025 (In millions) Net cash provided by (used in): Net cash provided by operating activities of continuing operations $ 5,321 $ 2,401 Net cash provided by operating activities of discontinued operations — 549 Operating activities 5,321 2,950 Net cash used in investing activities of continuing operations (5,172) (2,633) Net cash used in investing activities of discontinued operations (243) (22) Investing activities (5,415) (2,655) Financing activities of continuing operations (365) 347 Net increase (decrease) in cash, cash equivalents and restricted cash $ (459) $ 642 We have $5.0 billion available under an unsecured revolving credit facility that expires in 2031. We also have a commercial paper program to issue unsecured commercial paper notes up to a maximum principal amount outstanding, at any time, of $5.5 billion, with a maturity of up to 397 days from the date of issue. We had no commercial paper and revolving credit amounts outstanding as of June 27, 2026. As of June 27, 2026 and December 27, 2025, our aggregate principal short-term and long-term debt obligations were $3.3 billion. As of June 27, 2026, we had unconditional commitments of approximately $30.3 billion, of which $17.4 billion are for the remainder of fiscal year 2026. Our contractual obligations and purchase commitments relate primarily to our obligations to purchase wafers, substrates and components from third parties and future payments related to multi-year cloud service provider arrangements, and certain software and technology licenses. We work continually with our suppliers and partners on the timing of payments and deliveries of purchase commitments, taking into account business conditions. We also have commitments for leases that have commenced for approximately $1.2 billion and leases that have not yet commenced for $4.5 billion. In addition, as of June 27, 2026, we have data center lease guarantees with maximum potential amount of future payments of $4.1 billion. Subsequent to June 27, 2026, we entered into investment commitments of up to $5.0 billion, subject to certain conditions, which are expected to be made through fiscal year 2028 and long-term data center leases with aggregate future payments of $9.5 billion over lease terms of up to 16 years that are expected to commence in 2027 and 2028. 28 Table of Contents We believe our cash, cash equivalents, short-term investments and cash flows from operations along with our revolving credit facility and commercial paper program will be sufficient to fund operations, capital expenditures, commitments and strategic activities over the next 12 months and beyond. We believe we will be able to access the capital markets should we require additional funds. However, we cannot assure that such funds will be available on favorable terms, or at all. Operating Activities Our working capital cash inflows and outflows from operations are primarily cash collections from our customers, payments for inventory purchases and payments for employee-related expenditures. Net cash provided by operating activities of continuing operations was $5.3 billion in the six months ended June 27, 2026, primarily due to our net income of $3.7 billion, adjusted for non-cash and non-operating charges of $1.9 billion and net cash outflows of $274 million from changes in our operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities included a $966 million increase in accounts receivable driven primarily by higher revenue, a $1.0 billion increase in prepaid expenses and other assets primarily due to prepayments of supply agreements, partially offset by a $2.2 billion increase in accounts payable primarily due to timing of payment obligations. Net cash provided by operating activities of continuing operations was $2.4 billion in the six months ended June 28, 2025, primarily due to our net income of $1.6 billion, adjusted for non-cash and non-operating charges of $1.2 billion and net cash outflows of $284 million from changes in our operating assets and liabilities. The primary drivers of the change in operating assets and liabilities were a $1.1 billion decrease in accounts receivable due to higher receipts of customer payments and a $943 million increase in inventory primarily to support the continued ramp of Client and Data Center products in advanced process technology nodes. Net cash provided by operating activities of ZT Systems' data center infrastructure manufacturing business (ZT Manufacturing Business), classified as discontinued operations, was $549 million. Investing Activities Net cash used in investing activities of continuing operations was $5.2 billion for the six months ended June 27, 2026, which primarily consisted of purchases of short-term investments of $4.6 billion, purchases of property and equipment of $1.2 billion, and purchases of long-term investments of $844 million, partially offset by $1.6 billion of proceeds from the maturity and sale of short-term investments. Net cash used in investing activities of discontinued operations was $243 million, which represents payment for customary net working capital adjustments related to the divestiture of the ZT Manufacturing Business. Net cash used in investing activities of continuing operations was $2.6 billion for the six months ended June 28, 2025, which primarily consisted of cash used in acquisitions of $1.7 billion, the purchases of short-term investments of $796 million, purchases of strategic investments of $358 million, and purchases of property and equipment of $494 million, partially offset by $731 million of proceeds from the maturity and sale of short-term investments. Net cash used in investing activities of the ZT Manufacturing Business, classified as discontinued operations, was $22 million due to purchases of equipment. Financing Activities Net cash used in financing activities of continuing operations was $365 million for the six months ended June 27, 2026, which primarily consisted of stock repurchases of $221 million and stock repurchases for tax withholding on employee equity plans of $341 million, partially offset by proceeds from the issuance of common stock through employee equity plans of $205 million. Net cash provided by financing activities of continuing operations was $347 million for the six months ended June 28, 2025, which primarily consisted of cash received from the issuance of senior notes of $1.5 billion and $950 million of commercial paper, partially offset by stock repurchases of $1.2 billion. There was no net cash provided by financing activities of discontinued operations for the six months ended June 28, 2025. 29 Table of Contents