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AMD: AMD's Strong 2025 Results Set Stage for Continued Growth

Advanced Micro Devices, Inc. (AMD) reported record revenue of $34.6 billion for 2025, a 34% year-over-year increase, driven by strong growth in the data center and client segments. Gross margin was 52%, and earnings per share were $4.17, up 26% year over year. In the fourth quarter, revenue grew 34% year over year to $10.3 billion, with data center segment revenue increasing 39% to a record $5.4 billion. Earnings per share for the quarter came in at $1.53, beating estimates of $1.32.

AMD

USD 200.19

-17.31%

A-Score: 4.4/10

Publication date: February 3, 2026

Full Report

Author: Analystock.ai

šŸ“‹ Highlights
  • Record Q4 Revenue AMD reported $10.3B revenue in Q4 2025, up 34% YoY, driven by 39% growth in data center ($5.4B) and 37% in client segment ($3.9B).
  • Data Center AI Momentum Instinct MI350 GPU shipments and EPYC CPU adoption surged, with hyperscalers launching 500+ cloud instances, a 50% YoY increase.
  • Strong Financial Performance Gross margin reached 57% in Q4 (up 290 bps YoY), with $2.1B free cash flow and $2.3B cash from operations.
  • 2026 Growth Outlook Revenue expected to grow >35% CAGR over 3-5 years, with EPS targeting $20+ and data center AI (MI355/MI450) driving top-line expansion.

Segment Performance

The data center segment was a key driver of growth, with revenue increasing 39% year over year to $5.4 billion, led by accelerating Instinct MI350 Series GPU deployments and server share gains. The client segment also performed well, with revenue increasing 37% year over year to $3.9 billion, driven by strong demand for AMD Ryzen processors. EPYC adoption accelerated in the quarter, with hyperscalers launching over 500 AMD-based instances.

Outlook and Guidance

For 2026, AMD expects significant top-line and bottom-line growth, led by increased adoption of EPYC and Instinct, continued client share gains, and a return to growth in the Embedded segment. The company is guiding to 32% year-over-year revenue growth at the midpoint of its guidance. Analysts estimate next year's revenue growth at 38.7%. AMD's revenue is expected to grow at a rate of greater than 35% CAGR over the next three to five years.

Valuation

AMD's current valuation metrics indicate a premium, with a P/E Ratio of 91.04 and an EV/EBITDA of 63.55. The P/S Ratio is 11.38, and the ROE is 7.19%. The company's strong growth prospects and increasing profitability may justify some of this premium, but investors should carefully consider the risks and potential returns.

Operational Highlights

AMD is working closely with its suppliers to plan for a significant ramp in its CPU and GPU business in 2026. The company has entered into multiyear agreements with suppliers to mitigate supply chain risks. AMD is also investing aggressively in data center AI, software capabilities, and go-to-market efforts, which should drive long-term growth and profitability.

AMD's A-Score