AMD jumps on upbeat AI chip outlook as data-center demand lifts revenue forecast

There’s been a dramatic “return to AI data-center optimism,” one analyst notes.

Advanced Micro Devices Inc., the leading challenger to Nvidia Corp. in AI computing chips, soared to a record in early trading after a flood of data center spending bolstered its sales forecast. Second-quarter revenue will be $11.2 billion, plus or minus $300 million, the company said in a statement Tuesday. That compares with an average analyst prediction of $10.5 billion, according to data compiled by Bloomberg.  Bloomberg's Kunjan Sobhani joins Bloomberg Intelligence to discuss. (Source: Bloomberg)

Advanced Micro Devices’ shares (AMD.O) jumped to an ​all-time high on Wednesday as its strong outlook boosted investor confidence about sustained demand for AI infrastructure, sparking a rally across ‌global semiconductor stocks. AMD jumped 18.9 per cent and was set to add more than $110 billion in market value, if gains hold. Rival Intel (INTC.O) […]

Shares of Advanced Micro Devices surged nearly 13% on Wednesday after the chipmaker delivered stronger-than-expected quarterly results and issued an upbeat revenue forecast, reinforcing investor confidence that it is emerging as one of the strongest challengers to Nvidia in the artificial intelligence race.The stock, which had already gained nearly 60% this year ahead of the results, extended its rally after the company projected second-quarter revenue of $11.2 billion, plus or minus $300 million—well above Wall Street estimates of $10.52 billion.AMD also guided for adjusted gross margins of about 56%, ahead of analyst expectations of 55.4%, signalling stronger pricing power as demand for AI chips remains robust. For the March quarter, the company reported adjusted earnings of $1.37 per share on revenue of $10.25 billion.The biggest upside came from AMD’s data centre business, where revenue jumped 57% year-on-year to $5.8 billion as cloud computing giants continued to ramp up spending on AI infrastructure.The company is benefiting not only from demand for graphics processing units (GPUs) used to train AI models, but also from central processing units (CPUs), which are becoming critical as companies scale AI applications—a process known as inference. This positioning is helping AMD tap into a broader AI hardware opportunity as enterprises move from experimentation to deployment.Earlier this year, AMD announced a landmark deal to supply up to $60 billion worth of AI chips over five years to Meta Platforms, a transaction that also gives the Facebook parent the option to take up to a 10% stake in the chipmaker.The company also struck a separate AI partnership with OpenAI last year. Investors increasingly view AMD as the most credible alternative to Nvidia in AI chips, especially as hyperscalers look to diversify suppliers amid tight capacity and rising costs.AMD stock has significantly outperformed Nvidia this year. While AMD is up nearly 60% year-to-date, Nvidia has gained about 6%, while the broader Philadelphia Semiconductor Index has risen around 48%.Still, competition is intensifying. Intel last month issued a strong revenue forecast of its own as it ramps up in-house manufacturing to meet rising CPU demand. Unlike Intel, AMD outsources chip production to Taiwan Semiconductor Manufacturing Company, exposing it to tight foundry capacity as global demand for advanced chips continues to surge.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)