AMD Beats on Earnings, Raises Guidance on AI and Data Center Growth

Advanced Micro Devices, Inc. AMD reported first-quarter 2026 earnings of $1.37 per share, which beat the Zacks Consensus Estimate of $1.30 and rose from 96 cents a year earlier. This marks an 5.59% earnings surprise. In the prior quarter, it posted $1.53, topping the consensus mark of $1.32, delivering a 15.91% surprise. The company exceeded earnings estimates in each of the past four quarters.Revenue for the March 2026 quarter came in at $10.25 billion, topping expectations by 4.09% and up from $7.44 billion last year. AMD has also beaten revenue estimates in each of the last four quarters. Free cash flow reached $2.57 billion in the quarter compared with $727 million in the first quarter of 2025.The data center business led this performance, delivering $5.8 billion in revenue, a 57% year-over-year increase, supported by strong demand for AMD EPYC processors and continued shipments of AMD Instinct GPUs. The client and gaming segment generated $3.6 billion, rising 23% from a year ago, while the embedded division reported $873 million in revenue, reflecting 6% growth.The company delivered a strong first quarter, driven by accelerating demand for AI infrastructure, with the data center segment emerging as the primary contributor to revenue and earnings growth. The momentum is being supported by the rising adoption of high-performance CPUs and accelerators, fueled by inferencing and agentic AI workloads. Server growth is expected to pick up further as supply scales to meet demand, while increasing customer engagement around newer platforms like the MI450 series and Helios, along with a growing pipeline of large-scale deployments, provides improved visibility into future growth.For second-quarter 2026, AMD expects revenues of around $11.2 billion, with a possible variation of $300 million on either side, implying roughly 46% year-over-year growth.AMD, which belongs to the Zacks Computer - Integrated Systems industry, currently boasts a Zacks Rank #1 (Strong Buy), and its shares have gained 65.9% year to date. In the same period, two of its peers, Micron Technology, Inc. MU and International Business Machines Corporation IBM, have gained 124.3% and lost 22.7%, respectively. While MU also carries a #1, IBM has a #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.Bottom LineAMD’s performance over the first quarter indicates strength across key financial metrics, including faster revenue growth, expanding earnings and record quarterly free cash flow. This suggests effective execution and growing operating leverage, enabling continued investment in expansion while improving profitability.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks