AMD Soars: Data Center Chip Demand Drives Revenue Beat

Advanced Micro Devices (AMD) said Tuesday it expects second-quarter revenue to come in above Wall Street estimates, citing strong demand for its data-center chips as cloud companies increase spending on artificial intelligence infrastructure.

AMD forecast quarterly revenue of $11.2 billion, plus or minus $300 million, compared with analyst estimates of $10.52 billion. The company said its chips are being used for both AI model training and inference.

Data-center growth and margin outlook AMD’s data-center segment revenue rose 57% year over year to $5.8 billion in the first quarter, ahead of analysts’ expectations of $5.64 billion.

For the second quarter, AMD projected adjusted gross margin of about 56%, above the 55.4% expected by analysts.

First-quarter results For the first quarter, AMD reported adjusted earnings per share of $1.37 on revenue of $10.25 billion. Analysts had expected earnings of $1.29 per share on revenue of $9.89 billion.

Competition and supply constraints AMD is facing intensifying competition from Intel, which is expanding its in-house manufacturing capacity for CPUs.

The semiconductor industry is also dealing with a global shortage of high-bandwidth memory chips used in data centers, and rising memory prices could weigh on demand for consumer electronics.

AMD’s Client and Gaming segment, which includes consumer hardware, increased 23% year over year to $3.6 billion.