AMD’s first quarter results were marked by significant growth in its data center segment and broad-based demand across all business units. Management credited the results to a surge in AI infrastructure spending, particularly highlighting a 57% increase in data center revenue driven by strong sales of EPYC CPUs and Instinct GPUs. CEO Lisa Su emphasized that “data center is now the primary driver of our revenue and earnings growth,” noting that both cloud and enterprise customers ramped up adoption amid expanding AI workloads. The company’s ability to scale its supply chain and maintain product leadership in CPUs and GPUs played a key role in supporting this growth.
Is now the time to buy AMD? Find out in our full research report (it’s free for active Edge members).
AMD (AMD) Q1 CY2026 Highlights:
- Revenue: $10.25 billion vs analyst estimates of $9.90 billion (37.8% year-on-year growth, 3.6% beat)
- Adjusted EPS: $1.37 vs analyst estimates of $1.29 (5.8% beat)
- Adjusted EBITDA: $2.75 billion vs analyst estimates of $2.20 billion (26.8% margin, 24.7% beat)
- Revenue Guidance for Q2 CY2026 is $11.2 billion at the midpoint, above analyst estimates of $10.53 billion
- Operating Margin: 14.4%, up from 10.8% in the same quarter last year
- Inventory Days Outstanding: 160, down from 163 in the previous quarter
- Market Capitalization: $748.1 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From AMD’s Q1 Earnings Call
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Joshua Buchalter (TD Cowen) asked how AMD’s server CPU market outlook doubled so quickly and whether the company can reach its greater than 50% share target. CEO Lisa Su attributed the increase to faster-than-expected adoption of Agentic AI workloads and said AMD’s broad CPU portfolio positions it well for further share gains.
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Thomas O'Malley (Barclays) inquired about the cadence of server CPU and AI GPU growth and potential supply constraints. Su explained that while supply chain tightness persists, AMD has good visibility into customer demand and is confident in its ability to meet growth targets through 2027.
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Ross Seymore (Deutsche Bank) questioned how AMD differentiates from x86 and ARM competitors and the impact of new products on gross margins. Su emphasized AMD’s portfolio breadth and customization for various workloads, while CFO Jean Hu detailed margin tailwinds from server CPUs and embedded segments, partially offset by AI GPU ramp costs.
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Timothy Arcuri (UBS) requested clarification on the mix of unit versus price growth in server CPUs and competitive positioning in low latency architectures. Su noted most growth is unit-driven, with pricing reflecting inflationary pressures, and described AMD’s compute portfolio as broad enough to address evolving market needs.
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Vivek Arya (Bank of America) asked whether Agentic CPU growth is additive or cannibalizing to GPUs, and how memory cost inflation impacts AMD and its customers. Su responded that Agentic CPUs are largely additive to total addressable market, and AMD has secured sufficient memory supply to support demand, despite industry-wide cost pressures.
Catalysts in Upcoming Quarters
In the coming quarters, our analysts will closely monitor (1) the launch and customer adoption of AMD’s Venice CPUs and MI450 GPUs, (2) the ability to manage supply constraints and cost pressures, particularly in memory and data center build-outs, and (3) the sustainability of AI-driven demand across both cloud and enterprise customers. Execution on expanding strategic partnerships and maintaining gross margin stability will also be critical markers of progress.
AMD currently trades at $458.01, up from $355.26 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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