Shares of Advanced Micro Devices (AMD) surged 21.2% on Wednesday, 6 May, to around $430.60 apiece after the chipmaker reported solid first-quarter earnings and issued an upbeat outlook for the ongoing quarter as demand continues to soar for chips powering workloads.
AMD’s first-quarter sales rose to $10.3 billion, up sharply from $7.44 billion a year ago, the company said in a release on Tuesday. Revenue from its Data Centre segment came in at $5.8 billion, up 57% year-on-year, driven by server CPU strength.
AMD has also benefited from renewed demand for its central processing units (CPUs), as these general-purpose chips are increasingly being deployed in systems used to run AI software.
The company said the data centre CPU market is expected to grow at more than 35% annually and reach over $120 billion by 2030.
“We delivered an outstanding first quarter, driven by accelerating demand for AI infrastructure, with data centres now the primary driver of our revenue and earnings growth,” said CEO Lisa Su.
AMD added that it is witnessing strong momentum as inferencing and agentic AI continue to drive rising demand for high-performance CPUs and accelerators.
The company also provided strong guidance for the second quarter, with sales and adjusted gross profit projections coming in well above Wall Street consensus. AMD said it expects revenue of about $11.2 billion in Q2, with datacenter revenue up double digits sequentially and server CPUs expected to grow more than 70% year-over-year.
Advanced Micro Devices said it continued to strengthen its data center business during the quarter by expanding compute infrastructure partnerships and deepening strategic collaborations with major global technology players.
The company highlighted that Meta plans to deploy up to 6 gigawatts of AMD Instinct GPUs, while also becoming a lead customer for AMD’s upcoming sixth-generation EPYC processors.
AMD further said leading cloud providers, including Amazon Web Services, Google Cloud, Microsoft Azure, and Tencent, announced new and expanded cloud instances powered by its fifth-generation EPYC processors.
The four cloud-computing giants, often referred to as hyperscalers, have indicated that spending on artificial intelligence is unlikely to slow anytime soon, with their combined outlays now set to surpass.
AMD shares up 100%
Shares of Advanced Micro Devices have rallied nearly 100% so far this year, based on today’s high, putting the chipmaker on track to cross the $700 billion market capitalisation mark.
Although AMD still trails far behind rival in the graphics processing unit (GPU) market for AI data centres, investors have increasingly poured into AMD on optimism that the artificial intelligence opportunity is large enough to support multiple winners.
Expectations for the chipmaker have surged sharply in recent years. Since the artificial intelligence boom was ignited by OpenAI’s ChatGPT in 2022, Nvidia’s data centre sales have exploded from about $15 billion annually to $194 billion last year, highlighting the scale of the AI infrastructure market that AMD is now aggressively targeting.
(With inputs from Bloomberg)
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