Advanced Micro Devices' (AMD) stock price has climbed more than 15% on Wednesday after Advanced Micro Devices reported stronger-than-expected first-quarter results and issued a second-quarter revenue forecast above Wall Street estimates. The chipmaker reported revenue of $10.25 billion for the quarter ended March 2026, up 38% from $7.44 billion in the same period a year earlier. Adjusted earnings reached $1.37 per diluted share, above analyst expectations of $1.29. Net income rose to $1.38 billion, or 84 cents per diluted share, compared with $709 million, or 44 cents per share, a year earlier. AMD shares traded near $415 during Wednesday’s session after touching a new 52-week high above $430. The move lifted the company’s market value to about $678 billion, based on intraday market data. Data Center Revenue Drives AMD Earnings AMD’s data center business was the main driver of the quarter. Segment revenue reached $5.78 billion, up 57% year over year, supported by demand for EPYC server processors and Instinct graphics processing units used in artificial intelligence infrastructure. Chief Executive Lisa Su said the company is seeing stronger demand from agentic AI and inference workloads. These systems require large amounts of computing power after AI models are trained, creating demand for both GPUs and central processing units. The client and gaming segment generated $3.61 billion in revenue, up 23% from the prior year. The embedded segment reported $873 million in revenue, up 6%. AMD also reported free cash flow of $2.57 billion, compared with $727 million in the year-earlier quarter. AMD Q2 Guidance Tops Analyst Forecasts AMD forecast second-quarter revenue of about $11.2 billion, plus or minus $300 million. That outlook would represent about 46% year-over-year growth and came in above analyst expectations of about $10.5 billion. The company also guided for a non-GAAP gross margin near 56%, reflecting stronger sales of higher-value data center products. In the first quarter, non-GAAP gross margin reached 55%, up from the prior year. AMD raised its long-term view for the server CPU market, saying it now expects the market to reach at least $120 billion by 2030. The company expects annual growth of more than 35%, compared with its earlier estimate of about 18%. Su said the revised forecast followed discussions with major customers over the past 90 days. She said agentic AI adoption is creating new demand for server CPUs as companies expand computing systems for real-world AI workloads. AI Partnerships Shape Growth Outlook AMD pointed to growing demand for its Instinct MI450 accelerator and Helios rack-scale AI system. The Helios platform is expected to reach customers before the end of 2026. As we reported, Meta has agreed to deploy up to 6 gigawatts of AMD Instinct GPUs across its AI data centres. The first 1-gigawatt deployment will use a custom version of the MI450 chip. Meta is also expected to be a lead customer for AMD’s sixth-generation EPYC processors. Concurrently, according to reports, OpenAI is securing 1 gigawatt of AMD capacity starting in late 2026. Large cloud providers, including AWS, Google Cloud, Microsoft Azure, and Tencent, are also expanding use of AMD EPYC-based systems. The results lifted other semiconductor stocks during Wednesday’s session. Intel, Arm Holdings, and Qualcomm also advanced as investors reacted to AMD’s outlook for AI infrastructure demand. AMD continues to face competition from Nvidia, which has led the market for AI GPUs. AMD’s current strategy places focus on AI accelerators, server CPUs, and integrated rack-scale systems as customers seek more supply options for large computing deployments. The company also faces execution risks tied to export controls, reliance on manufacturing partner TSMC, and availability of high-bandwidth memory and advanced substrates. These factors could affect how quickly AMD can supply products linked to its updated server market forecast.
