AMD Forecasts $11.2 Billion Q2 Revenue on Blockbuster AI Chip Demand

AMD reported first-quarter 2026 revenue and adjusted earnings that topped analyst estimates and issued a second-quarter revenue forecast well above Wall Street expectations, driven by accelerating demand for artificial-intelligence infrastructure. The results sent the company's shares sharply higher in after-hours trading.

The Details

For the first quarter of 2026, AMD posted revenue of $10.25 billion, exceeding the $9.89 billion analysts had expected. Adjusted earnings per share came in at $1.37, ahead of the $1.29 estimate. The company projected second-quarter 2026 revenue of $11.2 billion, plus or minus $300 million, which would represent roughly 46 percent year-over-year growth. Analysts had forecast $10.52 billion for the quarter.

The company’s data center segment was the standout performer, with revenue jumping 57 percent year-over-year to $5.8 billion in the first quarter, fueled by demand for AMD EPYC processors and AMD Instinct GPUs. AMD Chair and CEO Lisa Su said in the earnings statement that the company delivered an outstanding quarter driven by accelerating demand for AI infrastructure, adding that data center revenue is now the primary driver of revenue and earnings growth. Su noted that inferencing and agentic AI are driving increasing demand for high-performance CPUs and accelerators.

AMD also reported record quarterly free cash flow of $2.6 billion in the first quarter, up from $727 million in the same period a year earlier. The company expects non-GAAP gross margin of approximately 56 percent in the second quarter.

Following the earnings release, AMD shares surged approximately 18.4 percent in after-hours trading, rising from a close of $355.26 to $420.70. The stock had already gained roughly 65 percent year-to-date as of May 5.

Context

AMD is widely viewed by analysts and investors as a leading challenger to Nvidia’s dominance in AI chips, particularly GPUs, while also tapping a growing CPU opportunity as AI inference workloads expand. Earlier in 2026, AMD announced agreements to sell up to $60 billion worth of AI chips to Meta Platforms over five years, and struck a supply deal with OpenAI.

At the same time, competition is intensifying from Intel, which is ramping up its in-house manufacturing capabilities after struggling with chip production for several quarters. That poses a potential threat to AMD, which outsources manufacturing to Taiwan Semiconductor Manufacturing Company.

The broader semiconductor industry is also contending with a global shortage of high-bandwidth memory chips, which may weigh on consumer electronics demand. AMD said it expects second-half gaming revenue to decline by more than 20 percent compared with the first half.

What's Next

During the earnings call, Su offered an upgraded long-term outlook for the server CPU market, saying AMD now expects the addressable market to grow at greater than 35 percent annually and to exceed $120 billion by 2030. That is a significant revision from the 18 percent yearly growth rate the company forecast in November 2025.

Analysts will be watching how efficiently AMD can convert the robust demand into high-margin revenue. Jake Behan, head of capital markets at Direxion, said AMD is levered to insatiable AI compute demand, and this quarter showed that demand is real, but the focus now shifts to how efficiently the company can convert that into high-margin revenue.