AMD’s 1Q26 adjusted EPS came in at US$1.37 (+43% y-o-y, beat by 6.2%) on revenue of US$10.3bn (+38% y-o-y). AMD’s outlook remains highly constructive, with 2Q26 revenue guidance of US$11.2bn implying 46% y-o-y growth, ahead of street estimates of US$10.5bn, driven by continued strength in data centre CPUs and AI accelerators.
AMD raised its server CPU TAM forecast and expects data centre AI revenue CAGR to exceed its prior longer-term target
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Reflecting stronger customer visibility and expanding large-scale deployments, management expressed growing confidence in generating annual data centre AI revenue in the tens of billions of dollars by FY27, while expecting longer-term DCAI growth to surpass its prior >80% CAGR target.
Positive industry read through for AEM
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We view AMD’s latest commentary as supportive for AEM, particularly as it reinforces the increasingly important role of CPUs alongside GPUs in AI infrastructure, which should bode well for contributions from AEM’s new fabless AI customer.
This mirrors earlier commentary from Intel around rising CPU intensity in inference and agentic AI workloads, where CPUs play a critical role in orchestration, data movement and head-node processing.
Maintain BUY
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Above is an excerpt from a report by DBS Group Research. Clients of DBS may access the full PDF report @ https://www.dbs.com/insightsdirect/.
