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AMD's AI Boom: Consumer Costs Soar
7 May
Summary
- AMD sees record data center revenue fueled by AI growth.
- Higher memory and component costs will impact gaming.
- Gaming revenue expected to decline over 20% in H2 2026.
AMD has reported record Q1 2026 fiscal results, with its data center revenue surging thanks to the ongoing AI boom. This positive financial news for investors, however, is tempered by a warning from CEO Lisa Su regarding rising component costs.
Su anticipates a slowdown in AMD's client and gaming businesses in the second half of 2026. This downturn is attributed to increasing memory and component expenses, which are expected to make products like RAM more expensive for consumers after May 2026.
AMD's Chief Financial Officer, Jean Hu, projected that gaming revenue specifically could decline by more than 20% in the latter half of 2026 compared to the first half. This prediction signals potential supply shortages and further price increases for Radeon graphics cards.
The company's semi-custom GPUs for consoles like PlayStation and Xbox may also be affected. This outlook for the second half of 2026 aligns with broader industry concerns about memory shortages extending through 2027, with predictions of permanently altered RAM pricing.
