KEY POINTS
- AMD posted $10.3 billion in Q1 revenue, up 38% year-over-year, with data center sales surging 57% to $5.8 billion on Instinct GPU and EPYC demand.
- Meta's commitment to deploy up to 6 gigawatts of AMD Instinct GPUs signals a broadening of the AI infrastructure customer base beyond Nvidia's dominance.
- Traders should watch AMD's Q2 guidance of $11.2 billion at the midpoint—a 46% year-over-year growth rate—and whether the stock can hold above the $400 level after its 16% post-earnings spike.
AMD reported first-quarter revenue of $10.3 billion on Monday, clearing the $9.89 billion Wall Street consensus by more than $400 million and sending shares up 16% in after-hours trading to roughly $410. The beat was driven almost entirely by data center, where revenue hit $5.8 billion—a 57% increase from a year earlier and the clearest signal yet that AMD's AI accelerator business has reached escape velocity.
Non-GAAP earnings per share came in at $1.37, well ahead of analyst estimates. Gross margin expanded to 55% on a non-GAAP basis, reflecting favorable product mix as high-margin Instinct MI300 and MI350 GPU shipments ramped through the quarter. CEO Lisa Su told analysts the company has "strong and increasing confidence" in reaching tens of billions of dollars in data center AI revenue next year.
Meta Goes All-In on Instinct
The headline design win this quarter was Meta's commitment to deploy up to 6 gigawatts of AMD Instinct GPUs across its data center fleet. The first gigawatt will run on a custom MI450-based processor, a configuration that underscores just how far AMD has come in convincing hyperscalers that its silicon can compete head-to-head with Nvidia's Blackwell architecture. A year ago, AMD's AI GPU business was still largely a rounding error next to Nvidia's $30-billion-plus quarterly data center number. That gap is narrowing quarter by quarter.
The EPYC server CPU franchise also contributed, with AMD continuing to gain share against Intel in the server market. Management noted that cloud revenue grew faster than on-premises data center sales, a mix shift that tends to carry higher margins and stickier customer relationships.
The Guidance That Matters
For Q2, AMD guided revenue to approximately $11.2 billion, plus or minus $300 million, representing 46% year-over-year growth and a 9% sequential increase. That guidance implies continued acceleration in data center, which analysts at Futurum Group estimate could approach $7 billion in the current quarter as new Instinct GPU configurations enter volume production.
The question for traders is whether AMD can sustain this trajectory in the second half of the year. Supply constraints in high-bandwidth memory and advanced packaging—the same bottleneck that has plagued every AI chip maker—remain the binding constraint. Deloitte now estimates the global AI chip market at roughly $500 billion for 2026, up from an initial $300 billion forecast, and memory price spikes of 50% by mid-year could squeeze margins even for companies with strong pricing power.
What to Watch Next
AMD shares traded near $415 in Wednesday's session, up roughly 20% from their pre-earnings level. The stock has historically pulled back 5-8% in the two weeks following a big earnings beat, so near-term profit-taking would be consistent with the pattern. The more important level is $380, which served as resistance in March and now functions as support. If AMD holds above that line into the end of May, the stock enters a technical no-man's-land with the next meaningful resistance around $450. Nvidia reports earnings on May 28—that print will be the next major catalyst for the entire AI semiconductor complex. Until then, AMD has the momentum.
