AMD released its financial results for the first quarter of 2026. In Q1 2026, on a non-GAAP basis, the company posted revenue of $10.25 billion, representing a year-over-year increase of 38% and a flat quarter-over-quarter performance. Net income reached $2.265 billion, up 45% year-on-year and down 10% quarter-on-quarter.
By business segment, the Data Center segment generated revenue of $5.8 billion in the first quarter, a 57% year-over-year rise and the primary driver of overall growth. This was mainly fueled by strong market demand for AMD EPYC™ processors and continued shipment growth of AMD Instinct™ GPUs, with server CPU revenue hitting a record high for the fourth consecutive quarter.
The Client and Gaming segment recorded revenue of $3.6 billion, up 23% year-on-year. Within this segment, Client revenue stood at $2.9 billion, a 26% year-over-year increase driven by robust demand for AMD Ryzen™ processors and steady market share gains. Gaming revenue amounted to $720 million, growing 11% year-on-year on strong demand for AMD Radeon™ GPUs, partially offset by lower revenue from the semi-custom business.
The Embedded segment delivered revenue of $873 million, with a 6% year-over-year increase, driven by stronger demand across multiple end markets.
Lisa Su, CEO of AMD, said the company delivered an outstanding performance in the first quarter, primarily driven by rising demand for AI infrastructure, with the data center business emerging as the core engine of revenue and profit growth. AMD expects growth in server-related businesses to accelerate markedly as supply scales up.
Looking ahead to the second quarter, AMD projects revenue in the range of $10.9 billion to $11.5 billion. Based on the midpoint of the guidance, revenue is forecast to rise 46% year-over-year and 9% quarter-over-quarter, underpinned by robust growth in data center business, expansion in client and gaming segments, and double-digit growth in embedded business. Non-GAAP gross margin is expected to stand at approximately 56%.
To meet the strong upward demand trend in the server CPU market, AMD is working closely with supply chain partners to substantially expand wafer and back-end production capacity to support such growth. Server CPU revenue is projected to grow more than 70% year-over-year in the second quarter and maintain strong momentum through the second half of 2026 and into 2027 alongside the production ramp of next-generation EPYC processors.
Lisa Su stated that AMD has begun shipping MI450 series accelerator samples to leading customers and remains on track to launch volume production and shipments of Helios in the second half of this year. The company holds stronger and growing confidence in achieving tens of billions of dollars in annual data center AI revenue by 2027, and is confident of outpacing its long-term growth target of an over 80% compound annual growth rate in the coming years.
Regarding the latest outlook for CPU market growth, AMD CEO, Lisa Su, stated during the Q1 earnings call that agentic AI is driving substantial incremental demand for CPUs. The CPU-to-GPU ratio for primary host nodes in the past was typically 1:4 or 1:8 while this ratio is now gradually approaching 1:1. Looking ahead with a massive proliferation of AI agents, it is even conceivable that the number of CPUs will surpass that of GPUs.
Driven by strong current market demand and the structural uplift in CPU compute requirements brought by agentic AI, the total addressable market (TAM) for server CPUs is expected to grow at a compound annual growth rate of over 35% — up from the prior forecast of 18% — and exceed $120 billion by 2030.
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