‘We have increased our supply capacity capability for server CPUs, and that’s one of the reasons we’re able to increase our [first-quarter] guide as it relates to the server business. And we see the ability to continue to grow that throughout the year,” AMD CEO Lisa Su says.
AMD CEO Lisa Su said Tuesday that the company expects more revenue in the first quarter in part because it was able to boost server CPU production capacity in the face of strong demand from the ongoing AI data center buildout.
Su made the comments during AMD’s fourth-quarter earnings call, where the company reported that revenue for the period grew 34 percent year over year and 11 percent sequentially to $10.3 billion, beating Wall Street’s expectations. This was mainly driven by record data center revenue, propped up by strong demand for its EPYC CPUs and the ongoing ramp of Instinct GPUs, as well as record client revenue from its Ryzen CPUs.
[Related: How Intel Got Caught Off Guard By A CPU Shortage Again]
The Santa Clara, Calif.-based company expected a first-quarter revenue of roughly $9.8 billion, plus or minus $300 million. While this would represent a roughly 5 percent sequential decline, it would mark a 32 percent increase year over year.
The guidance came in slightly higher than Wall Street’s expectations, and Su said one of the drivers was the ability to boost server CPU production capacity with supply chain partners.
“We have increased our supply capacity capability for server CPUs, and that’s one of the reasons we’re able to increase our [first-quarter] guide as it relates to the server business,” she said. “And we see the ability to continue to grow that throughout the year. There’s no question that the demand continues to be strong, and so we’re working with our supply chain partners to increase supply as well.”
This came in contrast to the situation outlined nearly two weeks ago by Intel. That’s when the rival said that its first-quarter revenue is set to decline 11 percent sequentially and 3.9 percent from the same period last year at the midpoint for its forecasted range of $11.7 billion to $12.7 billion because it is unable to meet unexpectedly high demand for its server CPUs. That guidance fell short of Wall Street’s expectations.
Su said AMD expects to see “very strong growth” in data center revenue this year in part because of the high demand for its EPYC CPUs.
“We’ve talked about the fact that CPUs are very important as AI continues to ramp, and we’ve seen the CPU order book continue to strengthen as we go through the last few quarters, and especially over the last 60 days,” she said. “So we see that as a strong growth driver for us. As [AMD CFO Jean Hu] said, we see server CPU growing from Q4 into Q1 in what normally is seasonally down, and that continues throughout the year.”
The other driver for AMD’s high data center expectations this year is the company’s Instinct GPUs, with Su calling the company’s plan to launch its Instinct MI450 GPU series in the second half of the year an “inflection point for us.”
“That revenue will start in the third quarter, but it will ramp significant volume in the fourth quarter as we get into 2027,” she said, adding that most of the MI450 GPU revenue this year is expected to be for rack-scale solutions like the “Helios” platform.
On that note, Su reaffirmed AMD’s expectation that it will make tens of billions of dollars in AI data center revenue next year, driven by the chip designer’s Instinct GPUs.
“I would say the customer engagements continue to proceed very well. We have obviously a very strong relationship with OpenAI,” she said. “[…] We’re also working closely with a number of other customers who are very interested in ramping MI450 quickly, just given the strength of the product. And we see that across both inference and training.”
Asked about the impact of the ongoing memory chip shortage, Su said she expects the PC market to shrink this year due to the “inflationary pressures of the commodities pricing, including memory.”
However, she added that AMD believes that it can grow its PC business this year, especially as it focuses on enterprise customers.
“That’s a place where we’re making a very nice progress in 2025 and we expect that in 2026 and just continuing to grow at the premium, higher end of the market,” Su said.
