Advanced Micro Devices Inc. (AMD) just delivered a quarter that had Wall Street and CNBC commentators buzzing. The chipmaker's first-quarter results, fueled by accelerating AI and server demand, sent shares to a new 52-week high. And the story isn't just about beating estimates—it's about a fundamental shift in how the world thinks about computing.

CNBC Highlights AI Demand, Data Center Growth

CNBC's Kristina Partsinevelos reported Tuesday that AMD's quarter underscored broad-based AI demand, with the Data Center business driving growth. Data center revenue surged 57% year-over-year to a record $5.8 billion, supported by strong demand for server CPUs and GPUs.

Partsinevelos said the results reinforced a broader "CPU renaissance" tied to agentic AI, echoing recent commentary from Intel Corporation (Intel) and expectations for Arm Holdings plc (Arm). She added that CEO Lisa Su pointed to stronger-than-expected customer forecasts for AMD's next-generation MI450 GPUs and Helios rack-scale systems.

Su also raised AMD's long-term outlook for the server CPU market. She now expects the total addressable market to expand more than 35% annually and exceed $120 billion by 2030 as agentic AI adoption accelerates. That's a big number, and it reflects the kind of demand that makes chip executives giddy.

However, Partsinevelos flagged a potential speed bump: AMD's data center revenue increased only modestly sequentially. That raises questions about whether Taiwan Semiconductor Manufacturing Co. Ltd. (TSM) capacity constraints could limit AMD's near-term growth, given the company's heavy dependence on TSMC for manufacturing.

Analysts See AMD Leading ‘Server Renaissance'

Susquehanna analyst Chris Rolland described AMD's quarter as "fantastic" on CNBC Tuesday, citing accelerating AI and server demand. He said Lisa Su highlighted growing AI orders, strengthening server demand, and increased supply expansion efforts to meet customer needs.

Rolland argued that agentic AI is fueling a "server renaissance," with AMD leading the trend through its server CPU business. He added that AMD's Helios rack-scale architecture and MI AI GPUs position the company as one of NVIDIA Corp.'s (NVIDIA) top competitors in what he described as a trillion-dollar AI market.

And here's the kicker for value-conscious investors: Rolland said AMD's valuation remains reasonable at roughly 30 times Susquehanna's 2027 estimates, given the company's growing position across AI CPUs and GPUs.

AI Infrastructure Boom Expands Beyond Chips

Rolland said the semiconductor industry remains in the "sweet spot" of the current chip cycle, with strong AI-driven demand supporting elevated valuations across the sector. According to him, investors currently favor hardware companies over software firms as AI infrastructure spending accelerates.

Looking ahead, Rolland identified AI power infrastructure as the next major semiconductor growth opportunity, driven by rapidly increasing power demands from next-generation AI systems. He said companies including Infineon Technologies AG (Infineon), ON Semiconductor Corp. (ON Semiconductor), Analog Devices, Inc. (Analog Devices), and Texas Instruments Inc. (Texas Instruments) could benefit, particularly those with exposure to silicon carbide and gallium nitride technologies.

Meanwhile, Partsinevelos noted that AMD's adjusted earnings per share of $1.37 and revenue of $10.3 billion both topped Wall Street estimates. She added that AMD guided for second-quarter revenue of $11.2 billion, ahead of analyst expectations, while forecasting gross margins to improve to 56% from 55% in the first quarter.

AMD Price Action: Advanced Micro Devices shares were up 18.43% at $420.74 during premarket trading on Wednesday. The stock is trading at a new 52-week high.