Shares of Advanced Micro Devices (AMD -1.54%) were trading up 2.8% as of 10:29 a.m. ET Wednesday after the chipmaker reported another quarter of robust growth after the market closed Tuesday.
In the first quarter, revenue increased by 71% year over year, while adjusted earnings per share more than doubled to $1.13. Both numbers crushed the consensus analyst estimates, and management raised its full-year outlook.
Worries over supply shortages and other macroeconomic headwinds are among the reasons AMD stock has plunged 34% year to date. Investors were particularly concerned about the state of PC demand. AMD has experienced strong demand for Ryzen central processing units (CPUs) and Radeon graphics processing units (GPUs) used in personal computers over the last few years. However, PC sales dropped 5% year over year in Q1, according to research firm IDC. That stoked fears that AMD's momentum might finally dissipate in 2022.
That isn't happening yet. Sales in AMD's computing and graphics segment grew 33% year over year, driven by strong demand for Ryzen and Radeon products.
AMD also reported revenue growth of 88% in its enterprise, embedded, and semi-custom segment, led by strong demand for Sony and Microsoft video game consoles, which are powered by custom AMD processors.
The stock's 2022 sell-off might have been unjustified based on the company's stellar performance and management's guidance. Previously, company guidance called for revenue to increase by 31% for the year, but after its strong first quarter and the recent closing of the Xilinx acquisition, revenue is now projected to rise by approximately 60%.
Moreover, this strong quarter shows the chipmaker is keeping up the pressure on its chief rival, Intel, which is trying to stage a comeback after losing significant market share to AMD.