Advanced microdevices CEO Lisa Su told CNBC on Wednesday that she massive revision of forecasts was due to the increase in demand for central processing units, driven by the growth of agents artificial intelligence.
“Agents are driving huge demand in the overall AI adoption cycle, and we are very excited to be in the middle of this cycle. Su told CNBC “Shouted in the street.”
The company beat analysts’ estimates for first-quarter earnings per share and revenue on Tuesday. Revenue grew 38% year-over-year, with Su pointing to the company’s data center business as the main driver.
“The main thing I can say is that we are seeing a shift in workload,” Su told CNBC, adding that the demand situation had become clearer over the past 90 days after discussions with the company’s largest customers.
CPUs have seen a resurgence as computing needs have evolved with the rise of agentic AI. While the business is lagging behind Nvidia In the graphics processing unit market, AMD is a leading manufacturer of processors needed for inference tasks.
Read more CNBC tech newsIn November, AMD forecast annual growth of about 18% in the server processor market over the next three to five years.
During the company’s earnings conference call Tuesday, Su revised that estimate to exceed 35% growth each year, with the market surpassing $120 billion by the end of the decade.
Insatiable demand for AI has created capacity constraints for semiconductors like IntelNvidia and AMD.
Despite the rapid growth, Su expects AMD to meet its customers’ computing demand.
“Yes, for sure, it’s tight,” Su said of the chip supply. “When we look at it, there’s a lot of demand, but we have a world-class supply chain that’s building at the moment.”
Analysts reacted positively to these increased forecasts.
Goldman Sachs increased its price target by $240 to $450. The bank also changed its rating on the chipmaker from hold to buy.
— CNBC’s Kristina Partsinevelos contributed to this report.
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One day stock chart of Advanced Micro Devices.