AMD and Intel both smashed first-quarter revenue expectations as data center demand surged. AMD pulled in $10.25 billion, 38% higher than last year, while Intel booked $13.6 billion in sales. The blowout results sent both stocks climbing despite technical indicators flashing overbought warnings.
AI Workload Reshuffle
Intel CEO Lip-Bu Tan confirmed a major shift in how data centers deploy AI hardware. The typical ratio of GPUs to CPUs for AI inference has moved from 8:1 to 4:1, with potential for CPU parity or dominance. That change aligns with AMD's 57% year-over-year spike in data center sales, now driving more than half its total revenue. Both companies raised full-year guidance after the strong quarter, with AMD guiding to $11.2 billion for Q2 against a $10.52 billion consensus.
Red-Hot Momentum
Stocks haven't slowed since early April. AMD shares jumped 87% while Intel rose 60% in just three weeks. Technical charts show both companies' 14-day relative strength index stayed above 70 all month—AMD at 72.54, Intel at 84.53—levels traders consider dangerously overbought. Investors ignored the warning signs as Intel surged 24% in a single session after its earnings report. Jim Cramer called Intel's turnaround under Tan remarkable, noting it went from potential bailout candidate to industry leader in 13 months.
Wall Street Doubt Emerges
The first major crack appeared on May 4 when HSBC downgraded AMD to Hold after its 77% April surge. Analysts cited concerns about how long the rally could last given the steep climb. That note marked the first serious pushback from a top bank as technical indicators keep screaming caution. Traders now weigh chasing momentum against the reality that both stocks remain deep in overbought territory. The semiconductor rally faces a test of its durability in the coming weeks as the market digests the strong results against the red-flag signals.
