AMD surged after more than doubling data center revenue, boosting outlook in 1st-quarter earnings report

• AMD posted net income of $555 million on revenues of $3.45 billion in its Q1 earnings report.
• The company also doubled data center revenue and increased its revenue growth expectations.
• CEO Lisa Su said AMD is still struggling with the chip shortage, but has seen improvements recently.

Advanced Micro Devices stock surged on Wednesday before paring gains after the company posted solid first-quarter earnings figures and raised its full-year revenue growth forecast on Tuesday.

AMD turned in first-quarter net income of $555 million on revenues of $3.45 billion.

Diluted earnings per share hit $0.45 compared to $0.14 in the same period a year ago.

The company also more than doubled its all-important data center revenue in the quarter, according to comments from its CEO, Dr. Lisa Su. The data center beat comes after Intel said its data-center sales dropped by 20% last week.

"Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution, and robust market demand," Dr. Lisa Su said.

"We had outstanding year-over-year revenue growth across all of our businesses and data center revenue more than doubled. Our increased full-year guidance highlights the strong growth we expect across our business based on increasing adoption of our high-performance computing products and expanding customer relationships," the CEO added.

AMD's computing and graphics segment revenue hit $2.10 billion in the first quarter, up 46% year-over-year due to Ryzen processor and Radeon graphics sales growth.

Management also revealed a positive outlook for 2021 in the first-quarter earnings release.

AMD now expects revenues to rise 50% from a year ago, implying a full-year revenue figure of $14.64 billion, compared with its previous forecast for a 39% revenue jump.

The CEO also addressed the semiconductor shortage that has been plaguing tech companies for the past few quarters in the earnings report.

"The entire semiconductor supply chain is very, very tight," Su told analysts on the quarterly conference call. "That being said, we've been working very closely with our supply chain partners. We have seen improvements that have led to the improved full-year guide."

Analysts remain mostly bullish on shares of AMD. The company boasts 29 "buy" ratings, 13 "neutral" ratings, and just two "sell" ratings.

Most recently, Raymond James tagged the firm with an "outperform" rating and a $100 price target citing its "durable technical advantage" over Intel on April 15.

AMD shares traded down 1.05% as of 3:26 p.m. ET on Wednesday.