Author: Lu Chunfeng , Phoenix Network Technology "Eye of the Storm"

Edited by: Dong Yuqing

Abstract: A financial report not only triggered a surge in AMD's stock price but also redefined the "alignment lines" within the global supply chain. As AI computing power becomes the most expensive and certain growth engine, some in the Chinese supply chain are passively "taking a slice of the pie," while others are beginning to be marginalized. The issue isn't whether the market is booming, but rather—whether you're on the computing power chain.

AMD has finally taken center stage in history.

After the US stock market closed on May 5th, semiconductor company AMD released its Q1 FY2026 earnings report, which immediately ignited market sentiment—its stock price surged over 20 % in after-hours trading, and its market capitalization soared by $ 107.8 billion in a single day. This long-awaited moment of glory has once again placed this previously suppressed chip giant at the center of the AI computing power arena.

On the surface, this is almost a flawless financial report: total revenue of $10.253 billion, a year-on-year increase of 38%, exceeding Wall Street's previous expectation of $9.89 billion and setting a new record for the same period;

Net profit reached $1.383 billion, a staggering 95% year-on-year increase. This near-doubling growth rate directly surpasses the growth ceiling of traditional hardware manufacturers; the GAAP gross margin soared to 53%, a 3 percentage point increase compared to the same period in 2025, with a significant increase in the proportion of high-margin AI-related products, highlighting profitability.

However, if we only focus on the better-than-expected results, we will miss the truly valuable information in this financial report. In fact, this is not a simple performance recovery, but a clear shift in path.

For many years, AMD's core label has been "CPU manufacturer": battling Intel in the PC and server CPU market, achieving market share gains through architectural innovation and process outsourcing. But the latest financial report reveals a different story—it is shifting from a "general-purpose computing supplier" to an "AI computing power participant."

This track has always been the most expensive and most crowded segment of the entire semiconductor industry chain.

At this time last year, AMD was still a follower in the field of AI, and the MI300 series was still struggling to gain traction. This year's financial report reveals a completely different story: data center revenue reached $5.8 billion, a year-on-year surge of 57%, exceeding the combined revenue of PC and gaming businesses for the first time, accounting for 56.6% of total revenue.

Simply put, more than half of AMD's revenue now comes from AI and data centers.

AMD Chairman and CEO Lisa Su delivered a more positive signal at the earnings call – AI inference and intelligent agents are driving strong demand for high-performance CPUs and accelerators, with Q2 revenue guidance at a midpoint of $11.2 billion (market expectation of $10.5 billion), implying a year-over-year growth of approximately 46%.

She significantly revised her 2030 potential market size for server CPUs upward to $120 billion, raising her CAGR forecast from 18% to over 35%. This is the strongest bullish signal for the entire AI infrastructure cycle.

But that's precisely where the problem lies.

This impressive growth is essentially tied to one variable: the AI capital expenditure cycle. Looking at the financial reports, it's clear that AMD's growth is almost entirely driven by AI-related businesses, with other businesses growing significantly slower than the data center segment. For example, PC demand is still recovering, but lacks new growth drivers, while the gaming business remains weak, lacking both a new console cycle driver and a compelling narrative of high growth.

This means that the financial report is essentially a "single-asset bet," and AMD is not experiencing a full recovery, but rather has staked everything on AI.

In the past month alone, AMD has achieved a record 12 consecutive days of gains, its longest winning streak since 2005. Over the past 30 days, its stock price has surged by more than 106%, pushing its market capitalization above $687 billion.

AMD has quietly seized a double-edged sword.

What does this financial report mean for China's industrial chain?

AMD's financial report sent shockwaves through the global computing power market. On May 6th, A-share GPU stocks surged, with Hygon Information Technology rising as much as 16.15% intraday, pushing its market capitalization above 800 billion yuan; Cambricon rose 7.32%. On May 7th, the computing power rally continued, with Cambricon opening higher and its market capitalization exceeding 784 billion yuan.

Image source: Wind

If we place this financial report within a larger context, its significance goes beyond simply "how much money AMD made." Given AMD's position in the global AI computing power chain, it's more like a high-frequency indicator of the AI computing power diffusion stage. It's not the source of demand, yet it's the first to feel changes in demand.

The core message conveyed by this first-quarter report is clear: the importance of CPUs in the AI market is constantly increasing. As AI tasks become increasingly complex, requiring both "inference" and "task execution," a large amount of CPU is needed for scheduling, data transfer, and parallel processing. This directly breaks through the limitations of CPUs.

Lisa Su stated that in AI infrastructure deployment, the ratio of CPUs to GPUs is shifting from the past 1:4 or 1:8 to closer to 1:1, and in some high-density agent scenarios, the number of CPUs may even exceed the number of GPUs.

Combined with the business progress of its GPU customers, AMD is confident of achieving tens of billions of dollars in annual revenue from data center AI by 2027.

This also means that AMD's rise is not entirely along the same path as Nvidia's. It will also drive a large number of opportunities for the Chinese industrial chain.

If you break down AI computing power, it is essentially an "infrastructure project": chips, servers, networks, connectivity, heat dissipation, and each link needs to be expanded.

In this chain, the role of Chinese companies is mainly focused on "selling water".

The most direct beneficiaries are those in the computing infrastructure sector: optical modules (800G, evolving towards 1.6T), PCBs and high-speed connections, server manufacturing and related equipment. The logic is simple: AMD's increased production volume is not a victory for one company, but rather a reflection of the rising global demand for computing power.

For example, when AMD GPU shipments doubled, orders for packaging and PCB suppliers increased accordingly. Tongfu Microelectronics is the only unavoidable core player in this trend. As AMD's largest global packaging and testing supplier, Tongfu Microelectronics handles over 80% of AMD's CPU/GPU/AI chip (MI300/400, EPYC) packaging and testing orders. This led to Tongfu Microelectronics' stock price surging along with AMD's on May 6th, hitting the daily limit. On May 7th, Tongfu Microelectronics continued to rise by over 6% at the opening.

The key to China's supply chain lies in the "most certain layer"—it doesn't determine the direction, but as long as expansion occurs, orders are guaranteed. These opportunities are characterized by being unattractive, but stable; they don't determine standards, but they are tied to scale.

However, at the same time, some domestic GPU manufacturers may face a pincer attack. In the past, AMD entered the inference market with better cost performance and a more open ecosystem. Its MI300X accelerator was priced at $15,000 and equipped with 192GB of memory, while the H100 with 80GB of memory was priced as high as $32,000, giving it a significant price advantage. The nstinct MI450 directly targets Nvidia's Rubin.

It's worth noting that in the first quarter of this year, while Jensen Huang repeatedly emphasized that Nvidia had not generated revenue in the Chinese market, third-party reports indicated that AMD sold approximately $100 million worth of its MI308 products in China. This cost-effective offensive has effectively compressed the window of opportunity for domestically produced GPUs to gain commercial market share in the context of domestic substitution.

But the question is, how long can this revelry last?

The current market frenzy for AI computing power chains is reminiscent of the "chip shortage wave" of 2021-2022—when global production capacity was scarce, the prices of various chips soared, the performance and stock prices of companies in the supply chain resonated, and the entire industry was immersed in an optimistic mood of supply falling short of demand.

However, the situation took a sharp turn for the worse. As end-user demand waned and inventories reversed, chip prices plummeted, forcing companies in the supply chain to face a brutal inventory correction cycle, putting pressure on both their performance and valuations.

The current AI supercycle differs structurally from that of the past in that AI demand is not driven by short-term inventory replenishment, but by real workload migration and application explosion, theoretically having a deeper industrial foundation for its sustainability. However, historical inertia cannot be ignored—cyclical expansion and capacity mismatch are the constant accompanying risks of all supercycles.

AMD currently relies almost entirely on its data center and AI businesses for growth, while its traditional businesses, such as gaming and embedded systems, continue to struggle. This single-asset-based structure means that if AI capital expenditures slow down, the company's revenue growth and profit elasticity will decline much more sharply than those of traditional multi-engine growth companies.

For A-shares, the underlying logic is equally fragile. The "computing power chain" that the market is hyping today must withstand the test of quarterly reports. If the overreaction fails to translate into genuine performance improvement, a valuation correction will be inevitable. AI hasn't cooled down, but the tech rally is unlikely to continue indefinitely.

The impressive growth we see in AMD today is no longer a robust recovery, but rather a structural euphoria highly concentrated in a single niche market, which is precisely a double-edged sword.

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