Advanced Micro Devices Inc.’s (NASDAQ:AMD) rapidly expanding data center business is facing a major second-quarter test, with prediction market traders placing strong odds on the chipmaker surpassing the $6 billion revenue mark.
AMD’s Data Center Revenue Jumps as AI Deals Drive Growth
AMD has seen its data center business emerge as a major growth engine amid rising demand for artificial intelligence infrastructure.
In its last quarterly report, AMD posted total revenue of $10.3 billion, up 38% from a year earlier. Data center revenue climbed 57% year over year to $5.8 billion, highlighting the company’s growing presence in the AI chip market.
The performance followed a strong prior quarter. In February, AMD reported fourth-quarter revenue of $10.27 billion, while its data center segment generated $5.4 billion, representing a 39% increase from the same period a year earlier.
AMD’s AI ambitions have also been supported by major partnerships. In July, the company announced up to a $5 billion investment in Anthropic, the developer of the Claude AI chatbot.
Last October, AMD announced a large-scale agreement with OpenAI under which the ChatGPT maker is expected to deploy 6 gigawatts of AMD graphics processing units.
AMD Q2 Data Center Revenue Predictions
A Polymarket prediction market shows traders are highly confident that AMD’s second-quarter data center revenue will exceed $6 billion. The company is scheduled to report on Tuesday.
The market assigned a 95% probability to revenue topping $6 billion, while the odds of exceeding $6.25 billion stood at 93%. Traders placed a 91% probability on AMD surpassing $6.5 billion.
Expectations declined sharply at higher levels. The probability of revenue exceeding $6.75 billion was 48%, while the odds of exceeding $7 billion were 32%.
AMD’s AI Growth Faces a Q2 Test
AMD’s upcoming earnings report is expected to further establish the company as a major force in the AI industry.
Analysts, on average, expect second-quarter revenue to rise 47% year over year to $11.31 billion, while earnings per share are projected to increase from 48 cents a year earlier to $1.61. The company’s strong growth has been fueled largely by the rapid expansion of its data center business.
Price Action: AMD shares closed at $476.15 on Friday, down 1.90%, according to Benzinga Pro.
Benzinga Edge Rankings place AMD in the 97th percentile for Growth, while the stock shows a negative short-term price trend but remains positive over the medium- and long-term.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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