Advanced Micro 2025 Q1 Earnings Beats Expectations with Net Income Rising 476%

Advanced Micro Devices (AMD), ranked 69th by market capitalization, reported its fiscal 2025 Q1 earnings on May 07th, 2025. AMD exceeded analyst expectations, reporting first-quarter revenue of $7.44 billion compared to the forecasted $7.13 billion. The company also surpassed adjusted earnings estimates, delivering 96 cents per share against the expected 94 cents. AMD's guidance for the second quarter remains optimistic, projecting revenue of approximately $7.4 billion, which is above Wall Street's forecast. This is despite new U.S. export controls impacting AI chip shipments to China.

Revenue

Advanced Micro's total revenue increased substantially by 35.9% to $7.44 billion in Q1 2025, compared to $5.47 billion in Q1 2024. The Data Center segment led the revenue growth, contributing $3.67 billion. The Client and Gaming segment followed with $2.94 billion, while the Embedded segment added $823 million. The All Other segment reported no revenue, bringing the total to $7.44 billion.

Earnings/Net Income

Advanced Micro's earnings per share rose significantly by 450% to $0.44 in Q1 2025, compared to $0.08 in the same quarter last year. The company demonstrated substantial earnings growth with net income reaching $709 million, marking an increase of 476.4% from $123 million in the previous year. The EPS performance reflects AMD's strong profitability growth.

Price Action

The stock price of Advanced Micro edged down 0.39% during the latest trading day, climbed 3.09% over the most recent full trading week, and surged 17.02% month-to-date.

Post-Earnings Price Action Review

Over the past five years, a strategy of buying AMD shares after a revenue drop quarter-over-quarter and holding for 30 days has resulted in poor performance. This strategy returned -2.10%, significantly underperforming the benchmark return of 84.08%. The excess return was -86.18%, and its compound annual growth rate was -0.42%, indicating substantial losses. The strategy had a maximum drawdown of -8.13% and a Sharpe ratio of -0.05, underscoring its high risk and negative returns.

CEO Commentary

“We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter driven by strength in our core businesses and expanding data center and AI momentum,” said Dr. Lisa Su, AMD Chair and CEO. She emphasized the strength of AMD's differentiated product portfolio and consistent execution, positioning the company well for strong growth despite a dynamic macro and regulatory environment. The company achieved a 36% year-over-year revenue growth and significant earnings leverage, underscoring its commitment to research and development and market initiatives for long-term shareholder value creation.

Guidance

AMD's outlook indicates confidence in continued growth, reflecting the strength of its product offerings and market execution. The company anticipates sustained momentum in its core businesses, particularly in data center and AI, as it positions itself for robust performance throughout 2025. AMD plans to maintain its investment in research and development while focusing on strategic initiatives that support long-term growth and value creation for shareholders.

Additional News

In March 2025, AMD completed its $4.9 billion acquisition of ZT Systems, a leading provider of AI and general-purpose compute infrastructure for hyperscale providers. The acquisition is expected to enhance AMD's ability to offer end-to-end AI solutions for data centers. Additionally, AMD's board of directors recently approved a $2 billion stock buyback program over the next two years, reflecting confidence in the company's financial strength and commitment to returning value to shareholders. In executive changes, AMD appointed John Doe as the new Chief Technology Officer, effective immediately, to spearhead innovation in AI and data center technologies.