ADVANCED MICRO DEVICES (AMD)·Q4 2025 Earnings Summary
AMD Smashes Q4 Estimates With Record $10.3B Revenue, Stock Falls 4% Aftermarket
February 3, 2026 · by Fintool AI Agent
AMD delivered a beat-and-raise quarter, posting record Q4 2025 revenue of $10.27 billion (up 34% YoY) and record non-GAAP EPS of $1.53 (up 40% YoY)—both significantly above consensus expectations . Data Center surged 39% to $5.4B, while Client & Gaming jumped 37% to $3.9B . Despite the strong beat, shares fell approximately 4% in after-hours trading to ~$232, extending a pattern of post-earnings declines for five consecutive quarters .
Did AMD Beat Earnings?
Revenue: $10.27B actual vs. $9.67B consensus = +6.2% beat
Non-GAAP EPS: $1.53 actual vs. $1.32 consensus = +15.9% beat
The quarter included approximately $390 million of AMD Instinct MI308 GPU revenue to China and a $360 million release of previously reserved inventory related to U.S. export restrictions—items that boosted gross margins above what would otherwise have been ~55% .
Ask Fintool AI AgentWhat Did Management Say?
"2025 was a defining year for AMD, with record revenue, net income, and free cash flow driven by broad-based demand for high-performance computing and AI products. We ended the year with significant momentum, with every part of our business performing very well." — Dr. Lisa Su, AMD Chair and CEO
"We see a clear path to achieve the ambitious targets we laid out at our financial analyst day last November, including growing revenue at greater than 35% CAGR over the next three to five years, significantly expanding operating margins, and generating annual EPS of more than $20 in the strategic time frame." — Dr. Lisa Su, on long-term outlook
"We are very pleased with our gross margin Q4 performance and the Q1 guide at 55%, which actually is 130 basis points up year-over-year while we continue to ramp our MI355 very significantly." — Jean Hu, EVP, CFO and Treasurer
How Did the Segments Perform?
Data Center ($5.4B, +39% YoY)
Record quarter driven by accelerating EPYC Turin CPU adoption and MI350 GPU deployments . Key highlights:
Server CPU:
- 5th Gen EPYC Turin accounted for >50% of server CPU revenue in Q4
- Hyperscalers launched 500+ AMD instances in 2025; total EPYC cloud instances now ~1,600
- Enterprise EPYC adoption more than doubled in 2025, with 3,000+ OEM solutions available
Data Center AI:
- 8 of top 10 AI companies now use Instinct GPUs for production workloads
- MI350 availability expanded with hyperscalers and neocloud providers
- ROCm ecosystem expanded with vLLM integration and enterprise AI suite launch
- Strategic partnership with Tata Consultancy Services for industry-specific AI solutions
Product Roadmap:
- MI400 series (MI455X, MI430X, MI440X) launching H2 2026 for training, HPC, and enterprise
- Helios rack-scale systems announced by HPE (with Juniper networking) and Lenovo
- MI500 series on 2nm with HBM4e on track for 2027
Client & Gaming ($3.9B, +37% YoY)
Client: Record $3.1B revenue (+34% YoY) driven by strong Ryzen processor demand and market share gains
Gaming: $843M (+50% YoY) driven by higher semi-custom revenue and strong Radeon GPU demand
Key launches:
- Ryzen AI 400 and PRO 400 Series platforms
- Ryzen 7 9850X3D — fastest gaming processor with Zen 5 and 3D V-Cache
- FSR "Redstone" — AI-powered upscaling technology
- Ryzen AI Halo Platform — first AMD AI developer platform running 200B parameter models locally
Embedded ($950M, +3% YoY)
Demand strengthened across several end markets after inventory adjustments earlier in the year . Expanded portfolio with Ryzen AI Embedded processors for automotive and industrial automation .
What Did Management Guide?
Q1 2026 Guidance:
The Q1 2026 guidance includes approximately $100 million of AMD Instinct MI308 sales to China . The midpoint of $9.8B is above the prior consensus of $9.67B, representing continued strong momentum.
Sequential decline of ~5% reflects normal seasonality, partially offset by continued Data Center strength.
Ask Fintool AI AgentWhat Changed From Last Quarter?
*Includes MI308 inventory reserve release; adjusted Non-GAAP gross margin was ~55%
Key Changes:
- Data Center accelerated from 22% YoY growth in Q3 to 39% YoY in Q4
- Client revenue hit record $3.1B, up from $2.75B
- Operating cash flow reached record $2.3B
- Cash position grew to $10.6B from $7.2B (up 46%)
Full Year 2025 Summary
By segment for FY 2025:
- Data Center: $16.6B (+32% YoY)
- Client & Gaming: $14.6B (+51% YoY)
- Embedded: $3.5B (-3% YoY)
How Did the Stock React?
Despite the beat-and-raise report, AMD shares fell approximately 4% in after-hours trading . This continues a pattern—AMD stock has declined following earnings in each of the past five quarters, even with solid revenue growth .
Possible reasons for the sell-off:
- High bar heading in: Stock surged 112% over the past year, with expectations already elevated
- Options implied ~9% move: The actual ~4-5% decline is within the range priced by options traders
- Gross margin benefited from one-time items: Adjusted gross margin of 55% (excluding MI308 China sales and reserve release) may have disappointed some
- Q1 guidance 5% sequential decline: Seasonal weakness, though still 32% YoY growth
Analyst sentiment remains bullish:
- 25 Buy ratings, 8 Hold, 0 Sell (Strong Buy consensus)
- Average price target: $286.66 (+21% upside from after-hours)
- HSBC raised target to $335 citing structural acceleration in server CPU demand
Ask Fintool AI AgentQ&A Highlights
On MI450/Helios Ramp & OpenAI Partnership: Lisa Su confirmed the MI450 series development is going "extremely well" and remains on track for a second-half 2026 launch with significant volume ramp in Q4 . The OpenAI partnership for 6 GW of Instinct GPUs is proceeding as planned, with the ramp starting in H2 2026 and accelerating into 2027 . Beyond OpenAI, Su emphasized "a broad set of customers that are very excited about MI450 series" .
On Data Center Growth Trajectory: When asked if data center could grow at the 60%+ annual target in 2026, Su stated: "The long-term target of, let's call it, greater than 60% is certainly possible in 2026" . She highlighted two growth vectors: strong server CPU demand (with EPYC orders strengthening over the last 60 days) and the MI450 inflection point in H2 .
On China Revenue: The $390M MI308 revenue in Q4 came from licenses approved in early 2025 . AMD is guiding $100M for Q1 but explicitly not forecasting additional China revenue "because it's a very dynamic situation" . MI325 license applications have been submitted and the company awaits approval.
On Server CPU Supply: CJ Muse (Cantor) asked about TSMC capacity constraints. Su confirmed AMD has increased supply capability for server CPUs and sees continued ability to grow throughout 2026 . She expects the server CPU TAM to grow "strong double digits" in 2026 as AI workloads drive CPU demand .
On Gross Margin Trajectory: Jean Hu noted that gross margin benefits from favorable product mix across all businesses—Turin CPUs, MI355 GPUs, commercial client growth, and embedded recovery . When MI450 ramps in Q4, margins will be driven largely by mix, with more color to come later .
On OpEx Leverage: Stacy Rasgon (Bernstein) challenged rising OpEx. Su acknowledged leaning into investment in 2025 given high conviction in the roadmap, but emphasized: "We should absolutely see leverage" in 2026, especially in H2 as revenue inflects. "OpEx should grow slower than revenue" .
On x86 vs ARM Competition: Ben Reitzes asked about ARM competitive dynamics. Su emphasized that agentic workloads spinning off AI tasks run on traditional CPUs, with "the vast majority on x86 today" . EPYC is optimized for both cloud and enterprise workloads, positioning it well as AI infrastructure expands.
On Gaming Segment Outlook: AMD expects semi-custom (console) revenue to decline by a "significant double-digit percentage" in 2026 as the console cycle enters its seventh year . However, Microsoft's next-gen Xbox with AMD SoC is on track for 2027 launch, and Valve's Steam Machine ships early 2026 .
Ask Fintool AI AgentBalance Sheet Highlights
AMD generated record free cash flow of $2.1 billion in Q4, with free cash flow margin of 20% . Full year free cash flow reached $5.5B, up 129% YoY .
Forward Catalysts
Near-term (H1 2026):
- Q1 2026 earnings (late April/early May)
- MI355 ramp continuation through H1 2026
- Venice CPU launch later in 2026 with "very high" customer pull
- Valve Steam Machine shipping early 2026
H2 2026 Inflection Point:
- MI450 series launch with "significant volume" in Q4
- Helios rack-scale platform shipments to begin (HPE, Lenovo announced plans)
- OpenAI deployment ramp starting in H2 2026, accelerating into 2027
2027 and Beyond:
- MI500 series launch on 2nm process with HBM4e memory
- Microsoft next-gen Xbox with AMD SoC
- Path to "tens of billions" in data center AI revenue by 2027
- Long-term targets: >35% revenue CAGR, >$20 EPS
Key Risks
- China export restrictions: Only $100M MI308 revenue guided for Q1; no additional China revenue forecasted due to "dynamic situation"
- MI450/Helios execution risk: Rack-scale systems are new territory; any delays could impact H2 revenue trajectory
- NVIDIA competition: Blackwell ramp continues; competitors also exploring SRAM-based inference accelerators
- Gaming segment headwind: Semi-custom revenue expected down "significant double-digit" in 2026
- PC market softness: Management expects PC TAM down in 2026 due to memory price inflation
- OpEx trajectory: OpEx continues rising; leverage depends on H2 revenue inflection
- Post-earnings pattern: Stock has declined after each of last 5 earnings despite beats
Data as of February 3, 2026. Sources: AMD Q4 2025 8-K filing, earnings call transcript, earnings presentation, and press release.
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