Advanced Micro Devices forecast second-quarter revenue above Wall Street expectations on Tuesday, driven by strong demand for its data-center chips as cloud companies ramp up spending on AI infrastructure. Shares jumped 12% in extended trading.
AMD is seen as a leading challenger to Nvidia's dominance in AI chips. The company has also tapped a new opportunity in central processing units as companies shift from training models to running AI applications.
CEO Lisa Su said the server CPU addressable market is expected to grow over 35% annually, reaching $120 billion by 2030. AMD's data center segment surged 57% to $5.8 billion in Q1, beating estimates.
"AMD is levered to insatiable AI compute demand, and this quarter showed that demand is real," said Jake Behan of Direxion.
The company expects Q2 revenue of $11.2 billion, versus estimates of $10.52 billion, with adjusted gross margins of about 56%. AMD also forecast server CPU revenue to grow over 70% year-over-year in Q2.