AMD (AMD) announced its first quarter earnings Tuesday, beating expectations on the top and bottom lines and providing a better-than-expected Q2 outlook.
Shares rose more than 5% on the news.
For the quarter, AMD saw adjusted earnings per share (EPS) of $0.96 on revenue of $7.4 billion, ahead of analysts’ expectations of $0.94 on revenue of $7.1 billion, based on Bloomberg consensus estimates. The company reported EPS of $0.62 and revenue of $5.4 billion in the same quarter last year.
The company also said it anticipates Q2 revenue of between $7.1 billion and $7.7 billion. Analysts were anticipating $7.2 billion.
“Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025,” AMD CEO Lisa Su said in a statement.
AMD’s announcement follows rival Intel’s (INTC) report, which saw the company beat on the top and bottom lines but issue lighter-than-anticipated revenue guidance in the second quarter. At the time, Intel CFO David Zinsner blamed the “current macro environment” for creating “elevated uncertainty across the industry.”
Nvidia (NVDA) will report its earnings on May 28.
AMD’s Data Center segment revenue topped $3.7 billion, versus expectations of $3.6 billion. The segment generated $2.3 billion in Q1 last year.
In April, AMD, like Nvidia (NVDA), announced that the Trump administration instituted tighter export controls on AI chips destined for China. The move effectively cuts off AMD’s ability to ship its MI308 AI processor to the region, and, according to the company, might result in as much as an $800 million charge on inventory, purchase commitments, and related reserves.
AI chip companies are also staring down the government’s AI diffusion rules, which would require certain countries to acquire special licenses to gain access to a limited number of US AI chips.
Shares of AMD are off 18% year to date and 36% over the last 12 months. Nvidia is down 15% year to date, but up 22% over the last year.
AI stocks took a major hit over the past few months on fears that the trade has been overhyped. DeepSeek’s January announcement that it managed to produce high-performance AI models using less than top-of-the-line chips further hammered chip stocks.
AMD’s Client segment, which includes revenue from the sale of laptop and desktop chips, saw $2.3 billion in revenue for the quarter. Analysts were anticipating $2 billion in revenue, up from $1.3 billion in Q1 last year.
PC makers produce a number of their products in China, which is subject to a 145% tariff, as well as Vietnam and Malaysia. Computers are currently exempt from Trump’s tariffs, but the administration has said it could implement duties on semiconductors based on the results of the Commerce Department’s Section 232 investigation.
Read more: What Trump’s tariffs mean for the economy and your wallet
AMD’s gaming business, which includes sales of GPUs and semi-custom chips for video game consoles, brought in $647 million versus expectations of $540 million.
Sony’s (SONY) and Microsoft’s (MSFT) consoles are approaching the second half of their life cycles, which generally means sales slide versus when they initially hit the market. Companies are also raising prices on the systems to contend with tariffs.
Consoles aren’t exempt from duties like laptops and desktops. As a result, Microsoft announced it is raising the price of its Xbox Series X by $100 to $599. The company also said it’s raising the price of some of its first-party games to $79 from $69.
Sony has increased the price of its PlayStation in Europe, but not in the US.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
For the latest earnings reports and analysis, earnings whispers and expectations, and company earnings news, click here
Read the latest financial and business news from Yahoo Finance
