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 Units (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 larger demand for high-performance server central processing items (CPUs), additional strengthening AMD’s development prospects.
Supported by sturdy fundamentals, beneficial market circumstances, 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 because of rising demand for its merchandise and improved working effectivity. The corporate generated US$10.3 billion in income in Q1, a 38% improve from the identical interval final 12 months. This development was pushed by sturdy efficiency within the Information Heart phase, continued momentum in Shopper and Gaming, and a restoration within the Embedded enterprise.
The Information Heart phase remained the biggest development driver, with income rising 57% 12 months over 12 months 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 development as extra cloud suppliers, enterprises, and sovereign prospects elevated deployment of Intuition accelerators.
Inside the Information Heart enterprise, server income rose by greater than 50% 12 months over 12 months, supported by sturdy gross sales to each cloud and enterprise prospects. 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 development, with income up 23% 12 months over 12 months.
AMD’s profitability improved considerably. Gross margin expanded to 55%, up 170 foundation factors from the earlier 12 months, supported by a beneficial product combine and a bigger contribution from high-margin knowledge middle merchandise. Adjusted earnings per share (EPS) grew 43% 12 months over 12 months, reflecting sturdy income development and working leverage.
AMD’s development isn’t slowing down
AMD’s development trajectory stays sturdy, pushed by accelerating demand for AI infrastructure. The corporate’s Information Heart phase is predicted to proceed posting sturdy development, supported by rising AI-related income and powerful demand for its Intuition GPUs.
Administration mentioned demand for its upcoming MI450 collection GPUs continues to strengthen, suggesting sturdy development forward. Additional, AMD is projecting tens of billions of {dollars} in annual Information Heart AI income by 2027.
The momentum isn’t restricted to GPUs. AMD expects server CPU income to extend by greater than 70% 12 months over 12 months within the second quarter, with sturdy 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 predicted 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 steerage additionally factors to a sequential acceleration in income development. Adjusted gross margin is predicted to achieve roughly 56%, a major enchancment from 43% in the identical quarter final 12 months.
Total, sturdy demand traits and a quickly increasing market alternative recommend that AMD is well-positioned to ship stable earnings development, making it a high inventory to personal.
