AMD Stock Surges After Strong Q1 Earnings and Bullish AI Outlook

Advanced Micro Devices (NASDAQ: AMD) saw its stock climb over 5% in after-hours trading on Tuesday after reporting better-than-expected Q1 earnings and upbeat guidance for Q2, driven by surging AI-related data center demand.

The chipmaker posted earnings per share of $0.96 on revenue of $7.44 billion, surpassing Wall Street expectations of $0.95 EPS on $7.11 billion in revenue, according to Investing.com. Gross margin also expanded, rising to 50% in Q1—up three percentage points from a year earlier.

AMD’s data center segment was the standout performer, with revenue jumping 57% year-over-year to $3.7 billion. This growth was fueled by strong sales of its CPUs and GPUs, both of which are increasingly used in AI workloads and server infrastructure. The company’s AI-driven momentum appears to be mitigating the effects of U.S. restrictions on chip sales to China.

For the second quarter, AMD forecasts revenue of approximately $7.4 billion, plus or minus $300 million, again beating analyst expectations, which were pegged at $7.24 billion. The company’s optimistic guidance underscores the growing role of AI technologies in driving semiconductor industry growth, with AMD emerging as a key beneficiary.

Investors and analysts alike are viewing AMD’s continued strength in the AI and data center markets as a bullish sign amid global supply constraints and geopolitical headwinds. As AI infrastructure spending accelerates, AMD is positioning itself as a top competitor in the high-performance computing space, challenging rivals in both CPU and GPU markets.

With solid Q1 results and confidence in future growth, AMD remains a strong contender in the ongoing AI-fueled chip race.