The synthetic intelligence (AI) infrastructure growth has pushed a major rally in a number of U.S. shares, and one of many high performers is Superior Micro Gadgets (NASDAQ:AMD). The corporate is benefitting from stable AI-driven demand for its graphics processing items (GPUs). On the identical time, the rise of Agentic AI is driving higher demand for high-performance server central processing items (CPUs), additional strengthening AMD’s development prospects.
Supported by robust fundamentals, beneficial market situations, and a stable product lineup, AMD seems well-positioned to ship substantial long-term development, making it a top-performing U.S. inventory that Canadian buyers ought to personal.
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AMD posted stable Q1 earnings
AMD reported a powerful first quarter (Q1), with income and earnings rising sharply as a result of rising demand for its merchandise and improved working effectivity. The corporate generated US$10.3 billion in income in Q1, a 38% enhance from the identical interval final yr. This development was pushed by robust efficiency within the Information Middle section, continued momentum in Consumer and Gaming, and a restoration within the Embedded enterprise.
The Information Middle section remained the most important development driver, with income rising 57% yr over yr to US$5.8 billion. Demand for AMD’s EPYC CPUs remained strong, whereas Intuition GPUs continued to see wider adoption. The corporate’s AI-related knowledge middle income additionally posted important double-digit development as extra cloud suppliers, enterprises, and sovereign clients elevated deployment of Intuition accelerators.
Inside the Information Middle enterprise, server income rose by greater than 50% yr over yr, supported by robust gross sales to each cloud and enterprise clients. AMD additionally gained extra market share as adoption of its fifth-generation EPYC Turin CPUs accelerated, alongside sustained demand for its fourth-generation EPYC processors.
The Consumer and Gaming section additionally delivered wholesome development, with income up 23% yr over yr.
AMD’s profitability improved considerably. Gross margin expanded to 55%, up 170 foundation factors from the earlier yr, supported by a beneficial product combine and a bigger contribution from high-margin knowledge middle merchandise. Adjusted earnings per share (EPS) grew 43% yr over yr, reflecting robust income development and working leverage.
AMD’s development shouldn’t be slowing down
AMD’s development trajectory stays robust, pushed by accelerating demand for AI infrastructure. The corporate’s Information Middle section is anticipated to proceed posting strong development, supported by rising AI-related income and robust demand for its Intuition GPUs.
Administration mentioned demand for its upcoming MI450 collection GPUs continues to strengthen, suggesting robust development forward. Additional, AMD is projecting tens of billions of {dollars} in annual Information Middle AI income by 2027.
The momentum shouldn’t be restricted to GPUs. AMD expects server CPU income to extend by greater than 70% yr over yr within the second quarter, with robust development more likely to proceed by way of the second half of 2026 and into 2027.
As well as, the corporate’s expanded strategic partnership with Meta is anticipated to additional assist future development.
For the second quarter of 2026, AMD initiatives income of roughly $11.2 billion, representing year-over-year development of about 46%. This steering additionally factors to a sequential acceleration in income development. Adjusted gross margin is anticipated to succeed in roughly 56%, a major enchancment from 43% in the identical quarter final yr.
Total, robust demand tendencies and a quickly increasing market alternative counsel that AMD is well-positioned to ship stable earnings development, making it a high inventory to personal.
