Advanced Micro Devices Inc (NASDAQ:AMD) stock rose 0.85% (As on May 7, 11:25:08 AM UTC-4, Source: Google Finance) after the company reported first fiscal-quarter earnings that topped expectations, and provided a strong forecast for current-quarter revenue. The company reported net income of $709 million, or 44 cents per diluted share, versus net income of $123 million, or 7 cents per share, during the year-earlier period. The data center segment, posted $3.7 billion in sales, topping a StreetAccount estimate. Data center sales were up 57% on an annual basis, which the company attributed to demand for both Epyc processors and Instinct GPUs. The company’s other major segment, Client and Gaming, includes chips for consumer devices such as laptops, gaming PCs and game consoles. The overall segment rose 28% on an annual basis to $2.9 billion. AMD said sales for its laptop and PC chips, which it calls client revenue, surged 68% year over year because of strong demand for chips called Zen 5 that the company released last summer. Gaming sales, however, declined 30% on an annual basis, which the company attributed to a decrease in console chip revenue. AMD’s embedded segment, which is mostly sales from the company’s 2022 acquisition of Xilinx, declined 3% on an annual basis to $823 million.

Meanwhile, California-based AMD has been grappling with new U.S. restrictions on the export of high-end artificial intelligence-processors to China, threatening a crucial region for the company. China was AMD’s second-largest market in 2024, accounting for more than 24% of total sales and creating roughly $6.32 billion in revenue.

AMD in the first quarter of FY25 has reported the adjusted earnings per share of 96 cents, beating the analysts’ estimates for the adjusted earnings per share of 94 cents, as per LSEG expectations. The company had reported the adjusted revenue growth of 36 percent to $7.44 billion in the first quarter of FY25, beating the analysts’ estimates for revenue of $7.13 billion.

For the current quarter, AMD expects about $7.4 billion in sales with a gross margin of 43%, versus Wall Street estimates for earnings of 86 cents adjusted on $7.25 billion in sales. The company’s forecast included $800 million in costs that the company said it would incur because the U.S. limited the export of some of the company’s artificial intelligence chips during the quarter. AMD also said that it expected about $700 million in lost revenue during the current quarter from export controls, and $1.5 billion in total through the end of AMD’s fiscal year.