AMD Surges 12% After Earnings Beat as AI Chip Demand Drives Record Revenue Forecast

Key facts

• Q1 EPS of $1.37, beating the $1.29 consensus.
• Q1 revenue reached $10.25 billion, surpassing expectations of $9.89 billion.
• Data center revenue rose 57% year-over-year to $5.8 billion.
• Q2 revenue forecast of $11.2 billion exceeded analyst estimates of $10.52 billion.
• Net income more than doubled to $1.38 billion from $709 million a year ago.
• AMD stock has more than tripled over the past year and is up 66% in 2026.
• CEO Lisa Su said the data center unit is the 'primary driver of our revenue and earnings growth.'

Earnings Beat and Record Forecast

first-quarter earnings on Tuesday that topped analysts' expectations, sending shares up 12% in extended trading. The chipmaker posted adjusted earnings per share of $1.37, beating the LSEG consensus estimate of $1.29, while revenue climbed 38% year-over-year to $10.25 billion, above the $9.89 billion forecast. For the second quarter, AMD projected revenue of approximately $11.2 billion, well ahead of the $10.52 billion analysts had anticipated. The strong guidance underscores surging demand for chips that power artificial intelligence workloads, a market where AMD is rapidly gaining ground.

Data Center Sales Surge 57%

The company's data center segment, which includes processors for AI and cloud computing, generated $5.8 billion in revenue during the first quarter, a 57% increase from $3.67 billion in the same period last year. The division has become AMD's primary growth engine, with CEO Lisa Su stating in a release that it is now the 'primary driver of our revenue and earnings growth.' Net income rose to $1.38 billion, or 84 cents per share, from $709 million, or 44 cents per share, a year ago. The results reflect AMD's successful push into the AI chip market, even as it trails dominant rival Nvidia in graphics processing units for data centers.

CEO Expresses Confidence in AI Revenue Trajectory

In prepared remarks ahead of the earnings call, Lisa Su said the company has 'strong and increasing confidence' in its ability to generate tens of billions of dollars in data center AI revenue next year. She added that AMD expects to 'exceed our long-term growth target of greater than 80 percent in the coming years.' 'Looking ahead, we expect server growth to accelerate meaningfully as we scale supply to meet demand,' Su said. The comments signal that AMD is betting heavily on the AI boom to sustain its momentum, despite ongoing supply constraints.

Stock Rally Reflects Investor Optimism

AMD's stock has more than tripled over the past year, including a 66% gain so far in 2026. The rally has been fueled by growing conviction that the AI chip market is large enough to support multiple players, even as Nvidia maintains a commanding lead. Investors have poured into AMD shares in recent months, betting that the company's MI300 and upcoming MI450 accelerators will capture a significant share of data center spending. The earnings beat and upbeat forecast are likely to reinforce that optimism.

Outlook and Challenges Ahead

While AMD's results are strong, the company faces headwinds including supply chain constraints and intensifying competition. Some analysts have warned that the stock's valuation may be stretched, and options markets are pricing in a potential 9% swing in AMD shares after the earnings report. Nevertheless, the company's ability to beat estimates and raise guidance suggests that demand for AI chips remains robust. With data center revenue now accounting for more than half of total sales, AMD is positioning itself as a key beneficiary of the AI infrastructure buildout.

The bottom line

• AMD's Q1 earnings and Q2 revenue forecast both exceeded analyst expectations, driven by AI chip demand.
• Data center revenue surged 57% to $5.8 billion, becoming the primary growth driver.
• CEO Lisa Su expressed strong confidence in reaching tens of billions in AI revenue next year.
• AMD stock has more than tripled over the past year, reflecting investor optimism in the AI market.
• The company faces supply constraints and stiff competition from Nvidia but sees ample opportunity in a growing market.