AMD (AMD) Stock Rockets 12% on Stellar Data Center Performance and AI Revenue Outlook

Quick Overview

• Advanced Micro Devices delivered Q1 EPS of $1.37, surpassing the $1.29 consensus, with total revenue reaching $10.25B versus $9.89B expected
• The data center segment generated $5.8B in revenue, representing a 57% year-over-year increase and exceeding the $5.6B projection
• Second quarter revenue outlook of $10.9B to $11.5B significantly topped Wall Street’s $10.52B estimate
• Lisa Su, AMD’s CEO, projected “tens of billions” in annual AI data center revenue reaching fruition by 2027
• Shares climbed more than 12% after hours, building on an impressive 60% year-to-date rally

Advanced Micro Devices delivered an across-the-board victory in its first quarter report, propelling shares higher by over 12% during extended trading hours on Tuesday.

The chipmaker’s earnings per share reached $1.37, comfortably exceeding the analyst consensus of $1.29. Total revenue touched $10.25 billion, surpassing the anticipated $9.89 billion. These figures represent substantial improvement from the year-ago period when AMD reported $0.96 EPS on $7.43 billion in revenue.

The semiconductor giant’s shares had already climbed approximately 60% year-to-date before Tuesday’s announcement. Following the earnings release, the stock advanced to $411.94 in after-hours action — representing a $56.68 increase from the regular session closing price of $355.26.

Advanced Micro Devices, Inc., AMD

The data center division delivered exceptional results. This segment produced $5.8 billion in revenue, marking a 57% year-over-year surge and narrowly beating the $5.6 billion analyst projection. The segment’s operating margin reached 28%, falling slightly short of Wall Street’s expectations.

The second quarter outlook captured significant attention. AMD projected revenue ranging from $10.9 billion to $11.5 billion — substantially exceeding the Street’s $10.52 billion forecast. The company’s adjusted gross profit expectations similarly surpassed consensus figures.

The sole area of concern: operating expense projections came in marginally higher than analyst models.

CEO’s Vision for AI Infrastructure

Su emphasized the expanding importance of CPUs within AI infrastructure. She projected the total addressable market for AMD’s CPU portfolio could expand at a 35% annual rate, potentially reaching $120 billion by 2030.

The company is developing its inaugural rack-scale system, designated Helios, which will integrate its GPUs and CPUs into a unified server rack — a design philosophy comparable to Nvidia’s NVL72 platform.

Major Partnerships and Critical Milestones

AMD has secured substantial agreements with Meta Platforms and OpenAI, issuing warrants for as many as 320 million AMD shares collectively, which vest contingent upon delivery milestones and performance metrics. The company anticipates commencing shipments under these contracts during the latter half of 2026 — representing a crucial validation of its scaling capabilities.

Outside the data center arena, AMD’s remaining business units performed solidly. Client segment revenue reached $2.9 billion compared to the $2.73 billion estimate. Gaming division revenue hit $720 million, exceeding the $668 million projection. Collectively, non-data-center revenue expanded 19% to $4.5 billion.

Intel, which disclosed its quarterly results on April 23, similarly exceeded projections and witnessed a 24% stock surge driven by robust data center performance. AMD now capitalizes on this favorable momentum entering the second quarter.

IDC forecasts global PC shipments will decline 11.3% in 2026 attributed to memory component shortages. Apple’s Tim Cook referenced comparable margin challenges stemming from escalating memory costs during last week’s earnings discussion.

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