Nasdaq 100: AMD Earnings in Focus as Data Center Growth Faces Tariff Headwinds

Q1 Results Expected to Show Strong Growth in Data Center Revenue

Advanced Micro Devices (AMD) will report first-quarter results after Tuesday’s closing bell, with investors closely monitoring guidance and data center momentum. Analysts forecast Q1 revenue of $7.13 billion and adjusted EPS of 94 cents, up 30% and over 50% year-over-year, respectively. The key driver: data center sales, projected to rise 55% to $3.63 billion.

Fourth-generation EPYC CPUs and AI accelerator platforms like the MI300X continue to gain traction, with major partners including Dell, HPE, and Lenovo bringing AMD’s data center solutions into production. The Zacks estimate pegs Q1 data center revenue at $3.4 billion, reflecting a 47.5% annual increase. However, sentiment around AI exposure is tempered by geopolitical pressures, particularly U.S. export restrictions targeting China.

Tariffs, Inventory Charges Weigh on Outlook

While AMD’s top-line growth remains robust, several analysts have slashed full-year targets due to China-related export controls. UBS’s Timothy Arcuri cut full-year EPS to $3.61 from $4.46, citing tariffs and reduced global demand. AMD recently disclosed a potential $800 million charge tied to export licensing issues for its MI308 chips.

Analysts remain divided on how severely China’s sanctions will impact near-term growth. Bank of America, Deutsche Bank, and Wedbush all lowered their price targets—some by as much as $45. Meanwhile, Citi maintained a bullish tone, citing unrelenting AI capex from major hyperscalers like Meta, Microsoft, and Alphabet, who collectively plan to spend over $200 billion on AI infrastructure in 2025.

Mixed Performance Across Business Segments

Strength in data center and client segments is being offset by declines in gaming and embedded units. Gaming revenue is forecast to drop 38.1% year-over-year to $570 million as semi-custom chip sales weaken. Embedded revenues are expected to fall 0.9% to $838 million due to soft industrial and communications demand. However, client revenue is projected to grow nearly 50% to $2.04 billion, driven by Ryzen processor demand in commercial PCs.

Market Forecast: Cautiously Bullish with AI Tailwinds

Despite tariff-related risks and export restrictions to China, AMD’s strong data center momentum and rising AI infrastructure spending by hyperscalers offer support. Investors should expect cautious management commentary but solid underlying fundamentals. The short-term outlook leans cautiously bullish, with AI-driven demand likely to cushion pressure from weak gaming and geopolitical risks.

More Information in our Economic Calendar.