Key Highlights
- Q1 earnings delivered EPS of $1.37 compared to analyst expectations of $1.29, with revenue reaching $10.25B versus $9.89B consensus
- Data center segment posted 57% year-over-year growth, hitting $5.8B against $5.6B analyst projections
- Second quarter revenue outlook of $10.9B–$11.5B significantly exceeded Wall Street’s $10.52B estimate
- CEO Lisa Su reaffirmed ambitious targets to generate “tens of billions” in AI data center sales by 2027
- Shares surged more than 12% in extended trading, building on a 60% year-to-date advance
Advanced Micro Devices delivered a comprehensive earnings beat for the first quarter, triggering a rally of over 12% in extended trading Tuesday.
The company reported earnings per share of $1.37, surpassing analyst forecasts of $1.29. Total revenue reached $10.25 billion, exceeding Wall Street’s $9.89 billion projection. This compares to EPS of $0.96 and revenue of $7.43 billion in the same quarter last year.
Shares had already climbed approximately 60% year to date before Tuesday’s report. In after-hours trading, the stock advanced to $411.94 — a gain of $56.68 from the closing price of $355.26.
Advanced Micro Devices, Inc., AMD
The data center division emerged as the clear winner. This segment generated $5.8 billion in revenue, marking a 57% increase from the prior year and edging past the $5.6 billion analyst estimate. Segment operating margin reached 28%, landing just below analyst projections.
The second quarter outlook captured significant attention. AMD projected revenue ranging from $10.9 billion to $11.5 billion — substantially higher than the $10.52 billion Wall Street consensus. The company’s adjusted gross profit forecast also exceeded analyst expectations.
Expense guidance registered as the lone area of weakness, coming in modestly above analyst estimates.
Lisa Su On AI Data Centers
CEO Lisa Su delivered clear messaging during the earnings call. “We have strong and increasing confidence in our ability to deliver tens of billions of dollars in annual data center AI revenue in 2027,” she stated, noting that AMD anticipates surpassing its long-term growth objective of more than 80% in the years ahead.
Su emphasized the expanding importance of CPUs within AI infrastructure. She projected the total addressable market for AMD’s CPU offerings could expand at a 35% annual rate, reaching $120 billion by 2030.
“As AI adoption scales, you need more inferencing and more agents. They all require CPUs for orchestration and data processing,” Su explained.
The company is developing its inaugural rack-scale system, named Helios, which will integrate GPUs and CPUs into a unified server rack — an approach comparable to Nvidia’s NVL72 platform.
AI Contracts and Key Tests Ahead
AMD has secured major agreements with Meta Platforms and OpenAI, granting warrants for a combined total of up to 320 million AMD shares that vest contingent on deliveries and performance metrics. The company anticipates initial shipments under these contracts during the latter half of 2026 — a critical milestone for demonstrating scalability.
Other business segments also posted solid results. Client revenue reached $2.9 billion compared to estimates of $2.73 billion. Gaming revenue totaled $720 million, exceeding the $668 million forecast. Collectively, revenue from segments outside data centers grew 19% to $4.5 billion.
Intel reported quarterly results on April 23, similarly beating expectations and experiencing a 24% stock surge driven by data center performance. AMD appears positioned to benefit from the same favorable momentum entering the second quarter.
IDC forecasts global PC shipments will decline 11.3% in 2026 stemming from memory supply constraints. Apple CEO Tim Cook referenced similar margin challenges from elevated memory costs during last week’s earnings discussion.
