“While we have yet to see a meaningful change in customer buying patterns, we think it prudent to manage the business with a level of conservatism going into the second half of the year.”

In context

“nue, and delivering consistent returns for our shareholders. With that, I will turn it over to Dave. David Zinsner: Thank you, Lip Bu. Our Q1 results mostly reflected our view entering the year that our two biggest markets were poised for growth. On the client side, the end of service for Windows 10, the expected growing adoption of AIPCs, and an aging installed base following the COVID era refresh pointed to a PC TAM growing 3% to 5%. Similarly, on the traditional server side, delayed infrastructure upgrades driven by the rapid adoption of AI servers in 2024 supported double-digit CPU core growth this year on a roughly flat unit. More recently, the economic landscape has become increasingly uncertain, driven by shifting trade policies, persistent inflation, and increased regulatory risk. While we have yet to see a meaningful change in customer buying patterns, we think it prudent to manage the business with a level of conservatism going into the second half of the year. First-quarter revenue was $12.7 billion, coming in at the high end of our guidance range, driven by better-than-expected Xeon sales. Similar to Q4 2024, we believe Q1 revenue benefited from customer purchasing behavior anticipation of potential tariffs, it is difficult to quantify the magnitude. Non-GAAP gross margin was 39.2%, approximately three percentage points above our guidance on much stronger-than-expected demand for Raptor Lake combined with improved cost for Meteor Lake. While we continue to see the mix of AIPCs growing throughout the year, the rate of growth off a lower-than-expected Q1 will be lower. We delivered first-quarter earnings per share of 13¢ versus our guidance of breakeven EPS driven by higher revenue, stronger gross margin, and lower operating expenses. I was part”