CPUs are suddenly the hottest commodity in AI, and AMD's Q1 earnings prove it. The chipmaker reported first-quarter results on Tuesday that blew past Wall Street estimates, sending shares up 16% on Wednesday. Revenue hit $10.25 billion, a 38% year-over-year jump, while adjusted earnings per share of $1.37 cleared the $1.29 consensus.
Net income nearly doubled to $1.38 billion. But the headline number under the hood tells the real story. AMD's data center revenue surged 57% to $5.8 billion, driven by demand for its Epyc CPUs and Instinct GPUs.
CEO Lisa Su called it an "outstanding quarter" fueled by "accelerating demand for AI infrastructure, with data center now the primary driver of our revenue and earnings growth." The shift reflects a broader industry recalibration. For years, the AI narrative has been all about Nvidia and its GPUs. But the rise of agentic AI and inferencing workloads is putting central processing units back in the spotlight. Wedbush analyst Matt Bryson captured the moment in a note titled "The CPU is dead, long live the CPU."
AMD is now on track to be a roughly $700 billion company when markets open, with the stock more than tripling over the past year. Bernstein analyst Stacy Rasgon upgraded AMD to outperform on Wednesday with a $525 price target, acknowledging he had been "continually surprised not only by the strength of AMD's business, but also by the strength of the stock." The second-quarter outlook reinforces the momentum. AMD guided for around $11.2 billion in revenue, well ahead of the $10.52 billion analysts expected.
Su said the company has "strong and increasing confidence" in reaching tens of billions of dollars in data center AI revenue next year.
Su's prepared remarks pointed to a key catalyst: Helios, AMD's first full rack-scale system for AI data centers, is set to begin shipments in the second half of the year. Both OpenAI and Meta have already signed up for deliveries, positioning AMD as a viable second source for AI compute alongside Nvidia's Grace Blackwell and Vera Rubin systems.
Meta's multiyear deal with AMD involves deploying up to 6 gigawatts of Instinct GPUs for AI data centers, with the first gigawatt powered by a custom MI450-based GPU. Amazon Web Services, Google Cloud, Microsoft Azure, and Tencent have all expanded their deployments of AMD's 5th-generation Epyc-powered cloud instances.
AMD's April performance was already signaling the shift. The stock surged 74.3% last month, according to S&P Global Market Intelligence, compared to Nvidia's 14.4% gain. A strong TSMC quarterly report on April 16 and a deepened AI collaboration with the French government added fuel.
"Together with our previously announced OpenAI partnership, these engagements position AMD as a core partner to the world's largest AI infrastructure builders," Su said.
