Advanced Micro Devices shares fell 5.27% ahead of Tuesday’s first-quarter earnings report. Investors expect results to show that the company is rapidly shifting toward more data center revenue, driven by higher AI infrastructure spending.
Analysts expect first-quarter revenue of $9.9 billion and adjusted earnings per share of $1.29, both about one-third higher than last year. Data center sales are forecast at $5.6 billion, up 53% year over year and accounting for 57% of total revenue. This segment, which was 43% two years ago, could reach nearly two-thirds of sales next year.
AMD’s growth reflects shifts in the AI chip market. NVIDIA’s GPU technology and software remain the industry standard for AI computing, with its data center revenue soaring from $15 billion before the AI boom to $194 billion last year. Still, tech companies seeking to diversify their supplier base have turned to AMD, the only other major GPU maker capable of handling enterprise AI workloads at scale.
AMD uses pricing to compete, lowering its data center operating margins to attract customers from Nvidia. For its two largest AI contracts, Meta Platforms and OpenAI, AMD has issued warrants totaling 320 million shares, vesting on delivery and performance. Shipments for both deals are expected to begin in the second half of the year, testing AMD’s capacity to ramp up production and meet the needs of demanding AI clients.
Beyond data centers, AMD’s PC, automotive, and industrial businesses are rebounding from recent lows. Combined first-quarter sales in these segments are expected to rise 13% from last year. This recovery positions AMD for what analysts expect to be a stronger second half of the year.
Featured CoursesRecent news
Spotify Stock Surges 15% on Long-Term Growth Targets and New Premium Features
Spotify shares had their best day in almost seven years, climbing 15% on Thursday. The jump came after the company’s investor day, where Spotify shared long-term revenue and margin goals to give investors a clearer picture of its plans. These specific commitments sparked new interest in the stock after a stretch of weaker performance. Co-CEOs […]
Nebius Stock Jumps 7.8% on $2.6B Bloom Energy Power Deal for AI Data Centers.
Nebius Group shares rose 7.8% in premarket trading after the AI cloud provider announced a $2.6 billion deal with Bloom Energy to supply fuel-cell power for its data centers. This move tackles a major challenge in building AI infrastructure. The deal also highlights the growing power crisis for neocloud operators and explains why Bloom Energy […]
SpaceX IPO Opens to Retail Investors Through Robinhood, Fidelity, and Schwab
SpaceX has announced that some shares will be available through Robinhood, Fidelity, and Charles Schwab. This means everyday traders can access the IPO at the same price and time as big institutional buyers. Here’s what this means for retail investors and why it’s important to pay attention to the details. This approach is different from […]
Trade with fewer limits
Day trade with fewer limits at fast speed. Buy stocks and ETFs at low fees.