AMD Surges 15% After Earnings Beat as AI Data Center Revenue Soars 57%

Key facts

• Q1 EPS of $1.37 vs. $1.29 expected, revenue of $10.25B vs. $9.89B expected.
• Revenue climbed 38% year-over-year to $10.25B from $7.44B.
• Data center sales surged 57% to $5.8B from $3.67B a year earlier.
• Net income rose to $1.38B ($0.84 per share) from $709M ($0.44 per share) a year ago.
• Q2 revenue forecast of $11.2B beat LSEG consensus of $10.52B.
• Stock jumped about 15% in extended trading; shares have more than tripled over the past year.
• CEO Lisa Su said data center is the 'primary driver of our revenue and earnings growth.'

Earnings Surge Past Expectations

Advanced Micro Devices delivered first-quarter results that blew past analyst estimates, sending shares up roughly 15% in extended trading. adjusted earnings per share of $1.37 on revenue of $10.25 billion, compared with the $1.29 and $9.89 billion expected by LSEG. Revenue climbed 38% from $7.44 billion in the same period a year ago, driven by an insatiable demand for chips powering artificial intelligence workloads. Net income rose to $1.38 billion, or 84 cents per share, from $709 million, or 44 cents per share, a year earlier. The company’s data center unit, now its largest and fastest-growing segment, posted a 57% revenue increase to $5.8 billion, up from $3.67 billion in the first quarter of 2025.

Data Center Dominance Drives Growth

AMD’s data center business has become the engine of the company’s transformation.the results, Su described the unit as the 'primary driver of our revenue and earnings growth.' She added that the company expects server growth to 'accelerate meaningfully as we scale supply to meet demand.' In prepared remarks ahead of the earnings call, Su expressed 'strong and increasing confidence' in AMD’s ability to reach tens of billions of dollars in data center AI revenue next year. She also said the company is on track to exceed its long-term growth target of greater than 80% in the coming years.

Second-Quarter Forecast Beats Estimates

For the second quarter, AMD forecast revenue of approximately $11.2 billion, surpassing the $10.52 billion expected by analysts surveyed by LSEG. The upbeat guidance reflects sustained momentum in AI chip sales, even as the broader semiconductor market faces headwinds from geopolitical tensions and supply chain uncertainties. The forecast comes amid a backdrop of escalating US-Iran tensions and ongoing trade frictions, but AMD’s outlook suggests that demand for AI infrastructure remains resilient. The company’s stock has more than tripled over the past year, including a 66% jump so far in 2026, as investors bet that the AI boom is large enough to support multiple players.

Investor Optimism Tempered by Cautious Analyst Views

Despite the strong results, some analysts urge caution. HSBC recently downgraded AMD to Hold ahead of the earnings report, citing limited upside potential given the stock’s meteoric rise. Meanwhile, ARK Invest, led by Cathie Wood, has been selling AMD shares while increasing positions in Shopify and GeneDx, signaling a shift in conviction. Other developments in the AI ecosystem underscore AMD’s growing relevance. Zyphra, an AI platform company, announced it is deploying systems powered by AMD GPUs, highlighting the chipmaker’s expanding footprint beyond its traditional stronghold in consumer and gaming processors.

Competitive Landscape and Long-Term Prospects

AMD remains a distant second to Nvidia in the market for graphics processing units used in AI data centers. Nvidia’s dominant position has made it the default choice for many hyperscale cloud providers, but AMD has been gaining ground with its MI300 series accelerators. The company’s ability to scale supply and win design wins will be critical to closing the gap. Su’s confidence in reaching tens of billions in AI revenue next year suggests that AMD sees a multiyear opportunity as enterprises and governments invest heavily in AI infrastructure. The company’s long-term growth target of exceeding 80% annual growth in data center AI revenue underscores its ambition.

What Comes Next

AMD’s stock reaction in the coming days will test whether the earnings beat and strong guidance can sustain investor enthusiasm. The company faces execution risks as it ramps production of next-generation chips and navigates a volatile macroeconomic environment. With the AI arms race showing no signs of slowing, AMD’s ability to capture a larger share of the data center GPU market will determine whether its stock can maintain its blistering pace. For now, the company has delivered a quarter that validates the bull case: the AI boom is real, and AMD is a key beneficiary.

The bottom line

• AMD’s Q1 earnings and Q2 guidance both beat analyst expectations, driven by 57% growth in data center revenue.
• CEO Lisa Su expressed strong confidence in reaching tens of billions in AI revenue next year.
• The stock surged 15% after hours, extending a rally that has more than tripled the share price over the past year.
• HSBC downgraded AMD to Hold, citing limited upside, while ARK Invest reduced its position.
• AMD still trails Nvidia in AI GPUs but is gaining traction with products like the MI300 and partnerships such as Zyphra.
• The company’s long-term growth target of >80% annual AI revenue growth underscores its aggressive ambitions.