Computer processor maker AMD (NASDAQ: AMD) reported Q1 CY2026 results exceeding the market’s revenue expectations, with sales up 37.8% year on year to $10.25 billion. On top of that, next quarter’s revenue guidance ($11.2 billion at the midpoint) was surprisingly good and 6.3% above what analysts were expecting. Its non-GAAP profit of $1.37 per share was 5.8% above analysts’ consensus estimates.
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AMD (AMD) Q1 CY2026 Highlights:
- Revenue: $10.25 billion vs analyst estimates of $9.90 billion (37.8% year-on-year growth, 3.6% beat)
- Adjusted EPS: $1.37 vs analyst estimates of $1.29 (5.8% beat)
- Adjusted EBITDA: $2.75 billion vs analyst estimates of $2.20 billion (26.8% margin, 24.7% beat)
- Revenue Guidance for Q2 CY2026 is $11.2 billion at the midpoint, above analyst estimates of $10.53 billion
- Operating Margin: 14.4%, up from 10.8% in the same quarter last year
- Free Cash Flow Margin: 25%, up from 9.8% in the same quarter last year
- Inventory Days Outstanding: 160, down from 163 in the previous quarter
- Market Capitalization: $556.8 billion
“We delivered an outstanding first quarter, driven by accelerating demand for AI infrastructure, with Data Center now the primary driver of our revenue and earnings growth,” said Dr. Lisa Su, AMD chair and CEO.
Company Overview
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, AMD grew its sales at an incredible 26.8% compounded annual growth rate. Its growth beat the average semiconductor company and shows its offerings resonate with customers, a helpful starting point for our analysis. Semiconductors are a cyclical industry, and long-term investors should be prepared for periods of high growth followed by periods of revenue contractions.
We at StockStory place the most emphasis on long-term growth, but within semiconductors, a half-decade historical view may miss new demand cycles or industry trends like AI. AMD’s annualized revenue growth of 28.2% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
This quarter, AMD reported wonderful year-on-year revenue growth of 37.8%, and its $10.25 billion of revenue exceeded Wall Street’s estimates by 3.6%. Beyond the beat, this marks 11 straight quarters of growth, showing that the current upcycle has had a good run - a typical upcycle usually lasts 8-10 quarters. Company management is currently guiding for a 45.7% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 39% over the next 12 months, an improvement versus the last two years. This projection is eye-popping for a company of its scale and suggests its newer products and services will catalyze better top-line performance.
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Product Demand & Outstanding Inventory
Days Inventory Outstanding (DIO) is an important metric for chipmakers, as it reflects a business’ capital intensity and the cyclical nature of semiconductor supply and demand. In a tight supply environment, inventories tend to be stable, allowing chipmakers to exert pricing power. Steadily increasing DIO can be a warning sign that demand is weak, and if inventories continue to rise, the company may have to downsize production.
This quarter, AMD’s DIO came in at 160, which is 23 days above its five-year average. These numbers suggest that despite the recent decrease, the company’s inventory levels are higher than what we’ve seen in the past.
Key Takeaways from AMD’s Q1 Results
It was great to see AMD’s revenue guidance for next quarter top analysts’ expectations. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 4.2% to $370.68 immediately following the results.
AMD may have had a good quarter, but does that mean you should invest right now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
