AMD tops estimates for first quarter as data center revenue jumps 57%

Advanced Micro Devices (AMD) has reported impressive first-quarter earnings that have exceeded market expectations, driven by a remarkable demand for chips that support artificial intelligence operations. The company's revenue for the quarter ending in March surged by 38%, reaching $7.44 billion compared to the same period last year. A standout performer in AMD's lineup is its data center sales, which skyrocketed by 57% to $5.8 billion, up from $3.67 billion a year ago. Looking ahead, AMD is anticipating second-quarter revenues of approximately $11.2 billion, surpassing analysts' estimates of $10.52 billion. CEO Lisa Su emphasized the significance of the data center division, stating it is now the primary catalyst for the company's revenue and earnings growth. AMD's net income also showed remarkable growth, increasing to $1.38 billion, or 84 cents per share, from $709 million, or 44 cents per share, in the same quarter last year. The company’s stock has experienced a meteoric rise, more than tripling in value over the past year, with a notable 66% increase so far in 2026. While AMD has traditionally lagged behind Nvidia in the graphics processing unit (GPU) market for AI data centers, investor confidence has surged recently, fueled by the belief that the market can accommodate multiple key players. AMD has long been recognized for its central processing units (CPUs), which are gaining renewed importance as the demand for AI capabilities evolves. Last week, AMD's shares received a boost following the announcement of a collaboration with Intel to develop a new instruction set for x86 CPUs. This feature, known as AI Compute Extensions, aims to enhance performance and energy efficiency by increasing compute density significantly. The semiconductor industry is currently grappling with a global memory shortage driven by an insatiable demand for AI, as well as manufacturing and supply chain challenges linked to geopolitical factors. Intel recently reported its best month on record, with shares more than doubling after strong first-quarter results. Meanwhile, memory manufacturer Micron has seen its shares soar over 700% in the past year, lifting its market capitalization beyond $700 billion. In addition to its CPU and GPU offerings, AMD is set to introduce its first full rack-scale AI data center system, Helios, later this year. This system is designed to compete with Nvidia's high-end offerings, which retail for over $3 million. Both OpenAI and Meta have already committed to purchasing Helios, positioning it as a formidable alternative for major players in the AI sector. The landscape of semiconductor technology is evolving rapidly, with AMD establishing itself as a key contender in the AI-driven market.