AMD's first-quarter revenue was $10.3 billion, with AI-driven growth accelerating; second-quarter guidance exceeds expectations.

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Semiconductor giant AMD delivered an impressive first quarter 2026 earnings report, with revenue up 38% year-on-year. Data center business became the main growth engine for the first time, and the company also gave a second quarter outlook above market expectations.

AMD's revenue this quarter reached $10.3 billion, with non-GAAP diluted earnings per share of $1.37, up 43% year-on-year. Data center segment revenue soared 57% year-on-year to $5.8 billion, becoming the primary driver of overall performance, with sustained shipment growth of EPYC processors and the Instinct GPU series. AMD CEO Lisa Su stated that strong demand for inference computing and intelligent agent AI is driving high-performance CPU and accelerator sales, with client orders for the MI450 series and Helios platform already exceeding the company’s prior expectations.

For the second quarter outlook, AMD expects revenue of around $11.2 billion, a year-on-year increase of about 46%, and a non-GAAP gross margin of about 56%. This guidance shows the company’s growth momentum is still accelerating, sending a positive signal to the market. CFO Jean Hu said the first quarter achieved a record-high quarterly free cash flow, with profitability continuously expanding, demonstrating the scale effect of the company’s operating model.

Data Center: AI Demand Drives Rapid Expansion of Core Business

In the first quarter, data center segment revenue was $5.8 billion, up 57% year-on-year, making it AMD’s largest source of revenue for the quarter, accounting for about 56% of total revenue. Operating profit for the segment was $1.6 billion, up 72% year-on-year.

On the business front, AMD Instinct GPU shipments continue to climb, while EPYC server processor demand remains strong. Lisa Su highlighted in the earnings statement that server business growth is expected to accelerate further, as expanded supply will support demand fulfillment.

In terms of strategic cooperation, Meta and AMD announced plans to deploy up to 6 gigawatts of AMD Instinct GPUs, with the first 1 gigawatt using the customized MI450 GPU. Meta also became an initial customer for the sixth-generation EPYC processors (codenamed "Venice" and "Verano"). AWS, Google Cloud, Microsoft Azure, and Tencent Cloud have also successively announced launch or expansion of cloud instances based on fifth-generation EPYC. In addition, AMD is collaborating with Samsung to develop next-generation AI memory and computing technology, including supplying HBM4 for the MI455X GPU and advancing DRAM solutions for the sixth-generation EPYC.

Client & Gaming: PC Market Share Continues to Expand

In the first quarter, Client and Gaming segment combined revenue was $3.6 billion, up 23% year-on-year. Client segment revenue was $2.9 billion, up 26%, mainly driven by strong demand for Ryzen processors and continued market share gains. Gaming revenue was $720 million, up 11% year-on-year; AMD Radeon GPU demand was steady, but semi-custom chip revenue declined, partially offsetting the growth.

On the product side, AMD released the Ryzen AI PRO 400 series enterprise desktop processors, supporting Copilot+ experiences, and also launched the Ryzen 9950X3D2 dual-version processor featuring dual-layer 3D V-Cache technology for creative and developer workloads.

Embedded Business: Demand Stabilizes, Multi-terminal Markets Rebound

The Embedded segment reported $873 million in first quarter revenue, up 6% year-on-year, with demand rebounding in several terminal markets. Operating profit for the segment was $338 million, basically flat compared to the previous quarter and the same period last year, indicating business has stabilized.

In terms of products, AMD introduced the new Ryzen AI Embedded P100 series processors, providing scalable low-power AI computing capabilities for industrial and edge scenarios; it also launched the Kintex UltraScale+ Gen 2 mid-range FPGA series, enhancing memory bandwidth and I/O performance for industrial, imaging, and broadcasting applications.

Profit Quality & Balance Sheet: Record Free Cash Flow for the Quarter

In the first quarter, AMD achieved a record quarterly free cash flow of $2.566 billion, a substantial increase from $727 million a year earlier, with the free cash flow margin rising from 10% to 25%. Net cash from operating activities was $2.955 billion, up more than twofold year-on-year.

From the GAAP financial indicators, net income for the quarter was $1.383 billion, up 95% year-on-year; operating income was $1.476 billion, up 83% year-on-year. Compared to the previous quarter, due to a 3% quarter-on-quarter increase in operating expenses, GAAP operating margin fell from 17% to 14%, and non-GAAP operating margin dropped from 28% to 25%.

As for the balance sheet, by the end of the first quarter, AMD’s cash and short-term investments totaled $12.347 billion, a significant increase from $10.552 billion at the end of the previous quarter, with liquidity continuously strengthening. Total assets reached $79.6 billion and total debt was $3.224 billion.

Updates ongoing...

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