Advanced Micro Devices 2025 Q3 Earnings Beats Expectations with 61.2% Net Income Growth

Advanced Micro Devices (AMD) delivered a strong performance in its fiscal 2025 Q3 earnings report, exceeding Wall Street expectations. The company reported revenue of $9.25 billion, a 35.6% year-over-year increase, while net income surged 61.2% to $1.24 billion. Guidance for Q4 2025 revenue of approximately $9.6 billion reflects 25% year-over-year growth, maintaining gross margin projections in line with estimates.

Revenue

AMD’s revenue growth was driven by robust demand across multiple segments. Data Center revenue surged to $4.34 billion, fueled by strong adoption of 5th Gen EPYC processors and MI350 Series GPUs. The Client and Gaming segment reported $4.05 billion in revenue, with Client revenue climbing 46% to $2.75 billion and Gaming revenue jumping 181% to $1.30 billion, driven by holiday console production. Embedded revenue totaled $857 million, while the "All Other" category remained at $0. Total net revenue reached $9.25 billion, reflecting a 36% year-over-year increase.

Earnings/Net Income

Earnings per share (EPS) rose 58.3% to $0.76, outpacing the prior year’s $0.48. Net income growth of 61.2% to $1.24 billion underscores AMD’s expanding profitability, supported by disciplined cost management and high-margin product mix.

Price Action

Shares of AMD gained 5.38% in the latest trading day but declined 3.03% for the week, ending the month with a 25.83% surge. Post-earnings volatility aligns with broader market skepticism over AI valuations, though fundamentals remain strong.

CEO Commentary

Dr. Lisa Su, AMD’s Chair and CEO, emphasized record revenue and profitability, attributing success to demand for EPYC, Ryzen, and Instinct AI accelerators. CFO Jean Hu highlighted 36% year-over-year revenue growth and record free cash flow, with strategic investments in AI and HPC positioning AMD for sustained growth.

Guidance

AMD projects Q4 2025 revenue of $9.6 billion (±$300 million), reflecting 25% year-over-year growth. Non-GAAP gross margin is expected at ~54.5%, excluding MI308 GPU shipments to China. Leadership remains optimistic about AI and HPC expansion, though market conditions and export restrictions could impact inventory charges.

Post-Earnings Price Action Review

The stock’s immediate post-earnings performance was mixed, with a 0.56% intraday gain following the results but a subsequent pullback amid broader tech sell-offs. Analysts note that AMD’s fundamentals—driven by AI data center growth and console demand—remain resilient, though near-term volatility could persist as investors reassess valuations.

Additional News

AMD secured licenses for MI308 GPU shipments to China, marking a strategic milestone after U.S. export restrictions. The company also announced a landmark deal with OpenAI, involving a 10% stake and a 6-gigawatt deployment of Instinct GPUs over multiple years. Additionally, AMD’s upcoming analyst day on November 13 is expected to clarify the MI450 AI accelerator’s value proposition and the ZT Systems acquisition’s strategic benefits.

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