AMD Stock Surges 12% as AI Chip Demand Drives Record $10.25 Billion Quarter

Key facts

• Q1 EPS of $1.37, beating the $1.29 consensus, on revenue of $10.25 billion (up 38% year-over-year).
• Data-center sales rose 57% to $5.8 billion, surpassing the $5.64 billion estimate.
• Q2 revenue guidance of $11.2 billion (plus or minus $300 million) exceeded the $10.52 billion consensus.
• Shares jumped 12% in extended trading after the earnings release.
• CEO Lisa Su said the data-center unit is the 'primary driver of revenue and earnings growth.'
• AMD expects the server CPU addressable market to grow over 35% annually, reaching $120 billion by 2030.
• The company has a $60 billion AI chip deal with Meta Platforms over five years and a deal with OpenAI.
• AMD's stock has more than tripled over the past year and is up 66% in 2026.

A Blockbuster Quarter Powered by AI Infrastructure Spending

Advanced Micro Devices delivered first-quarter results that shattered Wall Street expectations, propelled by an insatiable appetite for chips that run artificial intelligence workloads. earnings per share of $1.37 on revenue of $10.25 billion, easily topping the $1.29 and $9.89 billion analysts had forecast. Revenue climbed 38% from $7.44 billion a year earlier, while net income nearly doubled to $1.38 billion, or 84 cents per share, from $709 million, or 44 cents per share, in the same period last year. The stock surged about 12% in extended trading Tuesday, adding to a 66% gain so far this year.

Data Center Becomes the Growth Engine

The data-center segment, which includes both graphics processing units (GPUs) and central processing units (CPUs) for servers, posted a 57% revenue increase to $5.8 billion, beating the $5.64 billion analysts had expected. CEO Lisa Su declared the unit the 'primary driver of our revenue and earnings growth.' 'Looking ahead, we expect server growth to accelerate meaningfully as we scale supply to meet demand,' Su said in a statement. In prepared remarks, she expressed 'strong and increasing confidence' in AMD's ability to reach tens of billions of dollars in data-center AI revenue next year and 'to exceed our long-term growth target of greater than 80 percent in the coming years.'

CPU Market Expansion Opens New Front Against Intel and Nvidia

AMD is capitalizing on a shift from training AI models to running them — a process called inference — which increasingly relies on CPUs. The company now expects the server CPU addressable market to grow at more than 35% annually, reaching over $120 billion by 2030, up from the 18% growth rate it forecast in November. While analysts see AMD as best positioned to benefit from surging CPU demand, competition is intensifying. Intel, which gave a strong revenue forecast last month, is ramping up in-house manufacturing after struggling for several quarters. Unlike Intel, AMD outsources production to Taiwan's TSMC, a constraint that could become a bottleneck.

Analysts Warn of Manufacturing Constraints and Intel Threat

'AMD is levered to insatiable AI compute demand, and this quarter showed that demand is real, but the focus now shifts to how efficiently they can convert that into high-margin revenue,' said Jake Behan, head of capital markets at Direxion. The reliance on TSMC's tight capacity has prompted some analysts to suggest AMD may need to consider Intel as a future manufacturing partner. 'It may need to look to qualify Intel sooner than later for future products as that precious additional capacity will be needed based on the expedited success of NVIDIA's AI roadmap,' said Daniel Newman, CEO of tech research firm Futurum Group. Intel shares rose 4.5% in extended trading following AMD's report.

Strategic Deals with Meta and OpenAI Lock in Future Demand

Earlier this year, AMD agreed to sell up to $60 billion worth of AI chips to Meta Platforms over five years, a deal that allows the Facebook owner to purchase as much as 10% of the chip firm. The company also struck a deal with OpenAI last year, further cementing its position in the AI ecosystem. These agreements underscore the bet that the AI boom is large enough to support multiple players, even as AMD trails Nvidia in the GPU market. Investors have poured into AMD's stock on that optimism, driving the share price more than triple over the past year.

Outlook: Revenue Guidance Beats Estimates, but Execution Is Key

For the second quarter, AMD expects revenue of approximately $11.2 billion, plus or minus $300 million, compared with the $10.52 billion analysts had anticipated. The forecast signals sustained momentum, but the company must navigate supply constraints and rising competition. 'This quarter showed that demand is real,' Behan said, but the challenge lies in converting that demand into high-margin revenue. With the server CPU market set to explode and AI infrastructure spending accelerating, AMD's ability to scale supply will determine whether it can maintain its blistering growth trajectory.

The bottom line

• AMD's Q1 earnings and Q2 guidance both beat analyst expectations, driven by surging AI chip demand.
• Data-center revenue jumped 57% to $5.8 billion, now the primary growth driver.
• CEO Lisa Su expects tens of billions in AI revenue next year and a server CPU market exceeding $120 billion by 2030.
• Manufacturing dependence on TSMC and rising competition from Intel pose risks to AMD's growth.
• Major deals with Meta ($60 billion over five years) and OpenAI lock in long-term demand.
• AMD's stock has tripled in the past year, reflecting investor confidence in the AI boom's breadth.