The synthetic intelligence (AI) infrastructure growth has pushed a big rally in a number of U.S. shares, and one of many prime performers is Superior Micro Gadgets (NASDAQ:AMD). The corporate is benefitting from stable AI-driven demand for its graphics processing models (GPUs). On the similar time, the rise of Agentic AI is driving larger demand for high-performance server central processing models (CPUs), additional strengthening AMD’s progress prospects.
Supported by robust fundamentals, beneficial market situations, and a stable product lineup, AMD seems well-positioned to ship substantial long-term progress, 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 attributable to 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 progress was pushed by robust efficiency within the Information Middle phase, continued momentum in Shopper and Gaming, and a restoration within the Embedded enterprise.
The Information Middle phase remained the most important progress driver, with income rising 57% yr over yr to US$5.8 billion. Demand for AMD’s EPYC CPUs remained sturdy, whereas Intuition GPUs continued to see wider adoption. The corporate’s AI-related knowledge middle income additionally posted vital double-digit progress as extra cloud suppliers, enterprises, and sovereign clients elevated deployment of Intuition accelerators.
Throughout 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 Shopper and Gaming phase additionally delivered wholesome progress, 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 progress and working leverage.
AMD’s progress just isn’t slowing down
AMD’s progress trajectory stays robust, pushed by accelerating demand for AI infrastructure. The corporate’s Information Middle phase is anticipated to proceed posting sturdy progress, supported by rising AI-related income and robust demand for its Intuition GPUs.
Administration stated demand for its upcoming MI450 sequence GPUs continues to strengthen, suggesting robust progress forward. Additional, AMD is projecting tens of billions of {dollars} in annual Information Middle AI income by 2027.
The momentum just isn’t restricted to GPUs. AMD expects server CPU income to extend by greater than 70% yr over yr within the second quarter, with robust progress prone to proceed by the second half of 2026 and into 2027.
As well as, the corporate’s expanded strategic partnership with Meta is anticipated to additional help future progress.
For the second quarter of 2026, AMD initiatives income of roughly $11.2 billion, representing year-over-year progress of about 46%. This steering additionally factors to a sequential acceleration in income progress. Adjusted gross margin is anticipated to achieve roughly 56%, a big enchancment from 43% in the identical quarter final yr.
Total, robust demand traits and a quickly increasing market alternative counsel that AMD is well-positioned to ship stable earnings progress, making it a prime inventory to personal.
