AMD expects gaming revenue to drop over 20% in second half of 2026

After a record revenue of $10.3 billion in Q1, AMD now expects its gaming revenue to drop over 20% in second half of 2026 due to memory crunch.

Lisa Su teasing something AMD — Image: X/Twitter

AMD says that the company is expecting its gaming revenue to fall by more than 20% in the second half of 2026 compared to the first half. The main reason is higher memory and component costs that consumers still can’t keep up with. The forecast came during the company's Q1 2026 earnings call, where CEO Lisa Su said AMD is "planning the business accordingly."

Seeing this forecast isn’t surprising if we take into account the current state of the hardware market. AI and data center demand for HBM and GDDR memory has been squeezing supply for some time. Even Samsung has previously warned that the shortage is unlikely to ease until 2027 or later.

Gaming was actually decent in Q1, bringing in $720 million, up 11% year-over-year. Radeon GPU demand was solid, and the decline was partially cushioned by that. The H2 warning is about what comes next as costs bite harder into consumer budgets.

The prices of RAM, graphics cards, and PC components generally have been high consistently, with only sporadic price decreases in individual cases. This overall situation has a predictable effect on upgrade appetite.

AMD expects total PC shipments to be lower in the second half as a result, though it still anticipates its Client segment to grow year-over-year thanks to Ryzen demand in commercial and AI PC markets.

Still, the bigger picture doesn’t look great for consumers, as consumer hardware simply isn’t profitable enough for hardware makers. Even with a pessimistic forecast about the consumer segment, AMD still posted record overall revenue of $10.3 billion in Q1, up 38% year-over-year. These numbers were, of course, driven almost entirely by its Data Center segment, which brought in $5.8 billion.

The company recently signed a $100 billion GPU deal with Meta for AI infrastructure, which is a clear sign of where priorities currently sit, not only with AMD, but across the entire industry. Consumer gaming hardware is simply not where the money is right now.

Via: Tom's Hardware