AMD's (AMD) stock whipsawed in early trading Wednesday morning, as investors digested the company's better than anticipated Q1 earnings report and stronger than expected outlook Tuesday.

But analysts were torn on AMD's path forward, with Bank of America upgrading the company to a Buy and others like Jefferies lowering their price target on the firm on concerns about AI growth for the year.

Shares of AMD jumped as much as 4.9% at the start of trading on Wednesday before paring gains and dropping back to below 1%.

For the quarter, the AI chipmaker and Nvidia rival saw adjusted earnings per share (EPS) of $0.96 on revenue of $7.4 billion, ahead of analysts' expectations of $0.94 on revenue of $7.1 billion, based on Bloomberg consensus estimates. The company reported EPS of $0.62 and revenue of $5.4 billion in the same quarter last year.

The company also said it anticipates Q2 revenue of between $7.1 billion and $7.7 billion. Analysts were anticipating $7.2 billion.

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Analyst Vivek Arya cited AMD's "strong" sales outlook for the second quarter "despite China headwinds." Arya raised his price target on AMD shares to $120, while shares traded around the $100 level Wednesday morning.

In April, AMD, like Nvidia (NVDA), announced that the Trump administration instituted tighter export controls on AI chips destined for China. The move effectively cuts off AMD’s ability to ship its MI308 AI processor to the region, and, according to the company, might result in as much as an $800 million charge on inventory, purchase commitments, and related reserves.

AI chip companies are also staring down the government's AI diffusion rules, which would require certain countries to acquire special licenses to gain access to a limited number of US AI chips.

“Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution positioning us well for strong growth in 2025,” AMD CEO Lisa Su said in a statement.Lisa Su, chairwoman and CEO of Advanced Micro Devices (AMD), delivers the opening keynote speech at Computex 2024, Taiwan's premier tech expo, in Taipei on June 3, 2024. (Photo by I-Hwa CHENG / AFP) (Photo by I-HWA CHENG/AFP via Getty Images)·I-HWA CHENG via Getty Images

AMD’s earnings results follow rival Intel’s (INTC) report, which saw the company beat on the top and bottom lines but issue lighter-than-anticipated revenue guidance in the second quarter. At the time, Intel CFO David Zinsner blamed the “current macro environment” for creating “elevated uncertainty across the industry.”

Nvidia (NVDA) will report its earnings on May 28.

AMD's Data Center segment revenue topped $3.7 billion, versus expectations of $3.6 billion. The segment generated $2.3 billion in Q1 last year.

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Shares of AMD are off 18% year to date and 36% over the last 12 months. Nvidia is down 15% year to date, but up 22% over the last year.

AI stocks took a major hit over the past few months on fears that the trade has been overhyped. DeepSeek’s January announcement that it managed to produce high-performance AI models using less than top-of-the-line chips further hammered chip stocks.

AMD’s Client segment, which includes revenue from the sale of laptop and desktop chips, saw $2.3 billion in revenue for the quarter. Analysts were anticipating $2 billion in revenue, up from $1.3 billion in Q1 last year.

PC makers produce a number of their products in China, which is subject to a 145% tariff, as well as Vietnam and Malaysia. Computers are currently exempt from Trump’s tariffs, but the administration has said it could implement duties on semiconductors based on the results of the Commerce Department’s Section 232 investigation.

Read more: What Trump's tariffs mean for the economy and your wallet

AMD’s gaming business, which includes sales of GPUs and semi-custom chips for video game consoles, brought in $647 million versus expectations of $540 million.

Sony's (SONY) and Microsoft’s (MSFT) consoles are approaching the second half of their life cycles, which generally means sales slide versus when they initially hit the market. Companies are also raising prices on the systems to contend with tariffs.

Consoles aren’t exempt from duties like laptops and desktops. As a result, Microsoft announced it is raising the price of its Xbox Series X by $100 to $599. The company also said it’s raising the price of some of its first-party games to $79 from $69.

Sony has increased the price of its PlayStation in Europe, but not in the US.Sign up for Yahoo Finance's Week in Tech newsletter.·yahoofinance

Email Daniel Howley at [email protected]. Follow him on Twitter at @DanielHowley.

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