AMD first-quarter revenue beats expectations, raises its outlook for server CPUs, and shares surge 15%

AMD (Advanced Micro Devices) released its latest financial report: first-quarter revenue reached $10.3 billion, a year-over-year increase of 38%, and earnings per share also beat analysts’ estimates. AMD continues to expand in the AI accelerator market, and is gradually becoming an option for large cloud service providers seeking alternatives. In addition, the company remains optimistic about the long-term growth of its server central processing units (CPU) and has raised its market-size outlook. AMD’s share price rose by about 15% in after-hours trading, and is up 82% since 2026.

AMD’s first-quarter results and second-quarter revenue guidance

AMD’s first-quarter financial performance was solid, with total revenue of $10.3 billion, up 38% from the same period last year, exceeding analysts’ estimate of $9.89 billion. After excluding certain items, earnings per share (EPS) was $1.37, also better than the market estimate of $1.28. For its second-quarter financial guidance, the company expects revenue to be around $11.2 billion (plus or minus $300 million), significantly higher than the $10.5 billion predicted by the analysts compiled by Bloomberg. This revenue outlook suggests that AMD continues to win AI-related orders from large technology companies, driving overall revenue growth.

Data center growth and positioning in the AI market

In its core data center business, AMD’s first-quarter revenue grew sharply by 57%, reaching $5.8 billion, exceeding the market expectation of $5.61 billion. As hyperscalers such as Alphabet and Amazon plan to invest as much as $725 billion in the AI sector in 2026, AMD, as the second-largest AI chip maker in the market, is seeing its visibility increase gradually. Although its current market share is still behind Nvidia, as data center customers seek to diversify hardware supply sources, this trend is proving beneficial to AMD.

Server CPU market expansion and supply-chain capacity adjustments

AMD is highly confident about the long-term outlook for the data center CPU market, raising its market growth-rate forecast from the original 18% to over 35%. The company expects the market size to exceed $120 billion by 2030. AMD also expects its server CPU revenue to grow by more than 70% in the quarter. CEO Lisa Su emphasized during the earnings call that, to meet market demand, AMD is closely coordinating with supply-chain partners to substantially increase wafer foundry and back-end packaging and testing capacity, supporting long-term revenue targets for future data center business.

PC business conditions and memory shortage challenges

Although first-quarter PC-related revenue grew 23% to $3.6 billion, this segment still faces headwinds going forward. Because newly built AI data centers require large quantities of high-performance memory chips, memory manufacturers are shifting capacity, leading to crowding-out effects and rising costs for traditional PC memory. Management expects that higher component costs will cause PC shipments to decline in the second half. However, even with supply-chain challenges, AMD still expects its client revenue to maintain year-over-year growth and remain competitive in the overall market.

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