Strategic AI partnerships and rising data-center demand position AMD for accelerated growth amid a rapidly evolving semiconductor landscape.
Advanced Micro Devices (AMD) has forecast second-quarter revenue above Wall Street expectations, driven by strong demand for its data-center processors as cloud service providers continue ramping up investments in artificial intelligence infrastructure.
The company projected quarterly revenue of about $11.2 billion, with a possible variation of $300 million, surpassing analyst estimates of roughly $10.5 billion. Following the announcement, AMD shares rose nearly 12% in extended trading, adding to a year-to-date gain of around 65%.
AMD is increasingly viewed as a major competitor to Nvidia in the fast-growing AI chip market, particularly in graphics processing units (GPUs). However, the company is also expanding opportunities in central processing units (CPUs), benefiting from a shift in AI adoption toward inference workloads—where trained models are deployed to run real-world applications rather than just being trained.
CEO Lisa Su indicated that AMD now expects the server CPU addressable market to grow at an annual rate exceeding 35%, potentially surpassing $120 billion by 2030, significantly higher than previous projections. This momentum was reflected in AMD’s data center segment, which reported first-quarter revenue of $5.8 billion, marking a 57% increase year-on-year and beating market expectations.
Despite strong growth prospects, competition in the CPU market is intensifying. Intel has strengthened its outlook after improving manufacturing performance and expanding internal chip production capacity, positioning itself as a renewed challenger. Unlike Intel, AMD relies on external foundries such as Taiwan Semiconductor Manufacturing Company (TSMC) for chip production, making access to manufacturing capacity a critical factor for future expansion.
AMD has also secured major strategic partnerships to strengthen its AI position. Earlier this year, the company signed a deal valued at up to $60 billion to supply AI chips to Meta Platforms over five years, following a separate collaboration agreement with OpenAI.
Looking ahead, AMD expects server CPU revenue to grow more than 70% year-on-year in the second quarter, while adjusted gross margins are projected to reach about 56%, slightly above analyst forecasts.
