AMD exceeds expectations in Q1 revenue and EPS, but stock declines due to cautious guidance

Chip giant AMD reported its first quarter earnings on Tuesday, surpassing analysts’ expectations on both the top and bottom lines. However, the stock took a hit as the company provided guidance for the current quarter that fell short of expectations.

Despite the positive earnings report, AMD’s stock dropped about 6% in pre-market trading on Wednesday. This decline comes in the wake of rival Intel’s disappointing report last week, which also included a lower-than-anticipated revenue outlook for the current quarter.

AMD reported adjusted earnings per share of $0.62 on revenue of $5.5 billion, beating Wall Street estimates. The company’s Data Center revenue performed better than expected, coming in at $2.34 billion compared to the anticipated $2.31 billion.

The company’s MI300 chips, designed to compete with Nvidia’s popular H100 line of accelerators, have been a point of contention between the two tech giants. Nvidia recently announced its Blackwell platform as a follow-up to the H100, promising improved performance.

As the AI arms race continues to heat up, with companies like Microsoft, Google, and Meta investing heavily in AI data center capabilities, the competition in the PC market remains fierce. AMD’s Client revenue of $1.37 billion exceeded expectations, reflecting a positive trend in global PC shipments.

While AMD faces stiff competition from Nvidia and Intel in the AI PC market, analysts remain optimistic about the company’s potential for growth. With the MI300X expected to generate billions in revenue this year, AMD’s future outlook remains promising despite the stock’s recent dip.