5 Things Investors Should Know from AMD's Latest Earnings Call (Including the Company's $120 Billion Server CPU Opportunity)

Advanced Micro Devices (NASDAQ: AMD) recently reported some very impressive first-quarter 2026 results, with sales rising 38% to $10.3 billion and non-GAAP (adjusted) earnings jumping 43% to $1.37 per share.

And AMD appears poised for more growth from the expanding artificial intelligence (AI) market, as its management highlighted a handful of AI opportunities it's tapping into -- including a total addressable market for CPUs worth an estimated $120 billion.

Here are five of the most important highlights from AMD's latest earnings call.

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1. Data center sales are now the company's primary growth driver

AMD's management said on the call that its data center segment reached an inflection point in the quarter, becoming the company's biggest revenue driver.

Data center sales rose 57% in the quarter to $5.8 billion, accounting for more than 56% of the company's total revenue. AMD CEO Lisa Su said on the call: "These results mark a clear inflection in our growth trajectory and a structural shift in our business. Data center is now the primary driver of our revenue and earnings growth."

2. Management made a massive upward revision to AMD's CPU opportunity

AMD's management doubled its 2030 projection for the total addressable market for server CPUs to more than $120 billion -- up from its previous estimate of $60 billion.

The reason for such a significant increase is the company's conviction that CPUs will play a far bigger role in agentic AI and artificial intelligence inference training than previously thought.

For example, the previous ratio of CPU to GPUs in AI data centers was 1-to-4 or even 1-to-8, but AMD's leadership now believes it will become closer to 1-to-1. Su said, "As these agents do work, they spawn more CPU tasks."

3. Expanding AI partnerships will boost AI data center sales

AMD is expanding some of its current AI partnerships, including with both Meta Platforms and OpenAI -- which will add "tens of billions of dollars" to the company's data center revenue in 2027.

AMD will deploy up to 6 gigawatts of its Instinct GPUs for Meta and is co-designing a custom MI450 GPU accelerator for the company. And that's in addition to the co-engineering work AMD is doing on processors for OpenAI. Su said, "Together with our previously announced OpenAI partnership, these engagements position AMD as a core partner to the world's largest AI infrastructure builders with deep co-engineering relationships and multiyear visibility into large-scale deployments."

4. AMD is differentiating itself from its AI hardware competitors

AMD is banking on its ability to optimize both CPUs and GPUs together to give it an advantage in AI data centers. To do that, the company is working on more capable CPUs, some of which are purpose-built for AI infrastructure, as well as its Helios rack-scale platform for integrating CPUs and GPUs. Su noted that "AMD is uniquely positioned to lead in this next phase of AI with leadership products across high-performance service CPUs and AI accelerators, and the ability to optimize them together as fully integrated rack-scale solution."

The goal is to deliver large-scale AI systems to customers that are part of a larger shift toward fully integrated CPU and GPU systems that its rivals can't match.

5. Operating expenses rose 42% in the quarter

AMD is investing heavily in AI, resulting in operating expenses that surged 42% higher to $3.1 billion, mostly from "aggressive investment" in AI research and development. And management said expenses will climb to $3.2 billion in the second quarter.

But AMD Chief Financial Officer Jean Hu said the company's rising expenses are already fueling growth: "I think the most important thing is given the tremendous market opportunities we have, we actually are investing aggressively. If you look at the past several quarters, we're really leaning in, in investing, but all the AI investments are driving the revenue momentum."

It's hard to argue with the company's latest results. With AMD expanding its data center sales, differentiating itself among competitors, and tapping into an expanding AI market, the company has positioned itself to remain a top artificial intelligence player for years to come.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Meta Platforms. The Motley Fool has a disclosure policy.