AMD designs CPUs and GPUs used in AI infrastructure, competing in server CPUs with Intel and in accelerators with NVIDIA. A recent pullback into the $410 to $415 area coincides with strong quarterly results. Q1 2026 revenue reached $10.25 billion, with Data Center revenue at $5.78 billion and 57% growth. Free cash flow rose to $2.57 billion, and non-GAAP gross margin increased to 55%. Q2 guidance targets about $11.2 billion revenue and expects server CPU revenue to grow by more than 70% year over year. Management raised the server CPU TAM forecast to over $120 billion by 2030 and projected long-term EPS above $20, supported by visible orders tied to Meta deployments and OpenAI MI450 ramp.
"Revenue hit $10.25 billion, up 37.85% year over year, with Data Center alone contributing $5.78 billion at 57% growth. Free cash flow more than tripled to $2.57 billion, and non-GAAP gross margin expanded 170 basis points to 55%."
"Q2 guidance points to roughly $11.2 billion in revenue, up about 46% year over year, with server CPU revenue expected to "grow by more than 70% year-over-year in the second quarter." CEO Lisa Su raised the server CPU TAM forecast to "greater than 35% annually, reaching over $120 billion by 2030" on Agentic AI workloads and flagged a clear path to "more than $20 in EPS" long term."
"AMD trades at a trailing P/E of 141, with price-to-sales at 18 and EV/EBITDA near 91. Any slip in AI capex or a competitive misstep against NVIDIA gets punished from this altitude. China export restrictions on MI308 GPUs remain unresolved, and Reddit chatter has flipped from bullish scores of 75 to 95 in mid-May to bearish readings of 24 to 36 as profit-taking takes hold."
Read at 24/7 Wall St.
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