By Daniel Howley

AMD (AMD) will report its first quarter results after the bell on Tuesday, with investors looking for signs that the company is benefiting from the increased demand for central processing units (CPUs) driven by the global AI race.

AMD’s earnings come after Intel (INTC) reported its own earnings on April 23, beating analysts’ expectations on the top and bottom lines and providing a better-than-anticipated outlook on the strength of its data center business. That sent Intel stock soaring 24%.

Read more: Live coverage of corporate earnings

CPUs are becoming increasingly important in data centers due to the explosion of interest in AI agents, semi- or fully autonomous AI bots that can perform tasks on users’ behalf.

When agents take action, they use tools and software that run on CPUs, driving a massive increase in processor demand.

Like Intel, AMD sells its own line of CPUs, but unlike its rival, it also offers high-powered GPUs for training and running AI models, giving it the chance to attract a broader array of customers.

For the quarter, AMD is expected to report earnings per share (EPS) of $1.28 on revenue of $9.88 billion, according to Bloomberg analyst consensus estimates.

The company saw EPS of $0.96 and revenue of $7.43 billion in the same quarter last year.

Wall Street is projecting data center revenue of $5.6 billion in Q1, a 52% year-over-year increase from the $3.67 billion AMD reported last year.

AMD is preparing to launch its first rack-scale system called Helios, which will combine the company’s GPUs and CPUs into a larger server rack, similar to Nvidia’s Vera Rubin-powered NVL72 rack system.

Lisa Su, CEO of AMD, speaks during an AMD keynote address at CES 2026, an annual consumer electronics trade show, in Las Vegas, Nevada, U.S., January 5, 2026. REUTERS/Steve Marcus · REUTERS / Reuters

AMD’s Client revenue is expected to be $2.73 billion, up 19%, while AMD’s gaming business is anticipated to come in at $668 million.

While the company’s data center business is benefiting from the AI build-out, its PC business is set to take a hit, as memory supplies continue to shrink and the price of memory chips rises.

That’s forcing some companies to kill entry-level PCs with lower margins.

According to the International Data Corporation (IDC), global PC shipments are expected to fall 11.3% in 2026. Tablet shipments, meanwhile, could decline 7.6%.

During Apple’s (AAPL) Q2 earnings call last week, CEO Tim Cook noted that increased memory prices will likely hit that company’s margins in the coming quarters.

Email Daniel Howley at dhowley@yahoofinance.com. Follow him on X at @DanielHowley.