As the primary challenger to Nvidia (NVDA), AMD (AMD) reported first-quarter results that exceeded expectations after the U.S. stock market closed on Tuesday. The financial report showed that AMD’s first-quarter revenue grew 38% year-over-year to $10.3 billion, beating the analyst consensus estimate of $9.89 billion. Under Non-GAAP accounting standards, operating profit was $2.540 billion, a year-over-year increase of 43%; net income was $2.265 billion, a year-over-year increase of 45%. Adjusted earnings per share were $1.37, also surpassing market expectations of $1.28. Boosted by this news, AMD’s stock surged more than 14% in after-hours trading. The stock has already risen about 66% so far this year. If the after-hours rally continues into regular trading hours, the share price is expected to hit an all-time high.
By business segment, data center segment revenue grew 57% year-over-year to $5.8 billion, exceeding analyst expectations of $5.61 billion, driven primarily by strong demand for AMD EPYC processors and continued growth in Instinct GPU shipments. Combined revenue from the client and gaming segments grew 23% year-over-year to $3.6 billion. Within this, the client segment generated $2.9 billion, up 26% year-over-year, driven by Ryzen processor demand and increased market share; gaming segment revenue was $720 million, up 11% year-over-year, partly offset by a decline in semi-custom business revenue. The embedded business segment revenue grew 6% year-over-year to $873 million, with strengthening demand across multiple end markets.
AMD Chair and CEO Lisa Su stated that the company delivered excellent first-quarter results, primarily driven by accelerated demand for AI infrastructure, with the data center business becoming the main driver of revenue and profit growth. Looking ahead, as supply expands to meet demand, server business growth is expected to accelerate significantly. AMD forecasts second-quarter revenue of $11.2 billion, beating the analyst consensus estimate of $10.5 billion. The annual growth forecast for the data center CPU market has been sharply upgraded to over 35%, with the market size expected to exceed $120 billion by 2030, compared to a previous forecast of just 18% made in November last year. AMD stated that server CPU revenue will grow more than 70% in the second quarter, with strong growth continuing into the second half of 2026 and even into 2027. Su said the company is working closely with supply chain partners to increase production capacity, and she is increasingly confident in the company’s ability to achieve tens of billions of dollars in annual data center revenue next year. However, due to memory chip shortages, AMD expects PC shipments to decline in the second half of the year, though client segment revenue is still expected to grow year-over-year and outperform the market.
