advanced micro device CEO Lisa Su told CNBC on Wednesday that the large forecast revision was due to a surge in demand for central processing units due to the growth of agent-based artificial intelligence.
“Agents are really driving huge demand throughout the AI adoption cycle, and we’re very excited to be in the middle of that,” Su told CNBC’s “Squawk on the Street.”
The company on Tuesday beat analyst estimates for both first-quarter earnings per share and revenue. Sales increased 38% year-on-year, and Mr. Su highlighted that the company’s data center business was the main driver.
“The main thing I would say is that we are seeing a shift in workloads,” Hsu told CNBC, adding that the picture of demand has become clearer over the past 90 days after discussions with the company’s largest customers.
CPUs are making a comeback as computing needs change with the rise of agent AI. As the company follows suit, Nvidia In the graphics processing unit market, AMD is a leading manufacturer of CPUs needed for inference tasks.
AMD predicted in November that the server CPU market would grow about 18% annually over the next three to five years.
During the company’s earnings call on Tuesday, Hsu revised that forecast to an annual growth rate of more than 35%, predicting the market would top $120 billion by the end of 2010.
The insatiable demand for AI is constraining semiconductor production capacity, including: intelNvidia and AMD.
Despite rapid growth, Su expects AMD to be able to meet customers’ computing demands.
“Yes, it’s certainly tight,” Hsu said of chip supply. “When you look at it, there’s a lot of demand out there, but we have a world-class supply chain that has been building for this moment.”
Analysts responded positively to the guidance hike.
goldman sachs The price target was raised from $240 to $450. The bank also changed its rating on the semiconductor maker from “hold” to “buy.”
—CNBC’s Kristina Partinevelos contributed to this report.
Advanced Micro Devices’ daily stock price chart.
