AMD, the second largest computer processor maker, gave a strong outlook for the current quarter, showing that it is benefiting from the investment boom in artificial intelligence (AI). Second-quarter sales are expected to be $11.2 billion, plus or minus $300 million, the company said in a statement Tuesday. Analysts on average expected $10.5 billion.
AMD CEO Lisa Su said that data center spending is now the company’s main growth driver
After the news was announced, AMD’s stock price rose 11% in after-hours trading. The stock previously closed at $355.26 in the New York market, rising 66% this year.
This outlook shows that AMD is winning orders from the largest spenders in artificial intelligence computing. Although Nvidia remains the dominant supplier of AI processors, data center customers are increasingly looking for alternatives, a trend that benefits AMD.
The related expenditures are huge. Alphabet Inc. Google, Amazon and other so-called hyperscale cloud service providers have shown that their spending on artificial intelligence in 2026 may be as high as $725 billion.
AMD is the world’s second largest manufacturer of AI accelerators, which are used to train and run artificial intelligence services. However, there is still a big gap between AMD and Nvidia in this market.
AMD's product line also includes microprocessors used at the heart of server computers, where it is taking market share from Intel. All three companies also make graphics chips for laptops and desktops.
AMD’s first-quarter sales increased 38% to $10.3 billion. Excluding certain items, earnings per share were $1.37. Analysts had expected revenue of $9.89 billion and earnings per share of $1.28.
AMD data center business revenue increased 57% to $5.8 billion. Analysts on average expected $5.61 billion. Personal computer-related sales increased 23% to $3.6 billion.
AMD has benefited from a resurgence in interest in its central processing units (CPUs). Such general-purpose chips are increasingly being used in devices running artificial intelligence software.
AMD stated that the data center CPU market will expand at an annual growth rate of more than 35% and will exceed US$120 billion by 2030. As recently as November, the company's growth forecast at an analyst event was only 18%.
“In response to this demand, we are working closely with our supply chain partners to significantly increase our wafer capacity and back-end capacity to support this growth,” CEO Su Zifeng said on a conference call with analysts.
AMD said its server CPU revenue will grow by more than 70% in the current quarter, and that "strong growth" will continue into the second half of 2026 and into 2027.
Su Zifeng also said that the company has increased confidence in its ability to achieve tens of billions of dollars in annual data center revenue next year. She predicts that she expects to exceed AMD's long-term growth goal of more than 80% growth in the next few years.