Advanced Micro Devices (AMD) is set to report its first-quarter 2025 financial results after the market closes on Tuesday, May 6. This earnings release is highly anticipated, as investors look for signs of momentum in AMD’s data center and AI businesses amid a challenging market environment.
Analyst Expectations and Key Metrics
Wall Street expects AMD to post robust year-over-year growth, with consensus estimates calling for:
- Revenue of approximately $7.1–$7.13 billion, representing a 30% increase from the same quarter last year.
- Earnings per share (EPS) of $0.93–$0.94, up more than 50% year-over-year, marking AMD’s strongest EPS growth since mid-2022.
This anticipated growth is driven by strength in AMD’s data center segment, which has become the company’s primary revenue engine.
The data center division is expected to see a 54.9% year-over-year increase, fueled by rising demand for AMD’s Instinct GPUs and EPYC CPUs, especially as major cloud providers like Microsoft and Meta Platforms deploy AMD’s latest AI hardware.
Growth Drivers and Recent Developments
AMD’s recent $4.9 billion acquisition of ZT Systems, a leader in hyperscale server manufacturing, is expected to accelerate its push into large-scale AI clusters and strengthen its data center portfolio. The company’s AI-related revenue surpassed $5 billion in 2024, and management has signaled ambitions for “tens of billions” in AI revenue in the coming years.
The client segment, which includes desktop and laptop chips, is also expected to rebound, thanks to a 9% increase in global PC shipments in Q1 2025. Analysts project client revenue to surge over 50% year-over-year, providing a secondary boost to AMD’s top line.
Challenges and Risks
Despite these growth drivers, AMD stock has underperformed both the broader market and the semiconductor sector. Shares are down about 33% over the past year and 17% year-to-date, reflecting investor concerns about:
- Intense competition in AI chips, particularly from Nvidia, which still dominates the discrete GPU market.
- Export restrictions and tariffs, especially new U.S. licensing requirements on shipments of MI308 chips to China. AMD has warned of potential charges up to $800 million if licenses are delayed or denied, and China accounted for over 24% of AMD’s 2024 revenue.
- Broader macroeconomic headwinds and regulatory uncertainties that could weigh on guidance and future growth.
What to Watch in the Earnings Call
Investors will closely scrutinize:
- Data center and AI segment performance and market share gains.
- Management’s commentary on export restrictions and China exposure.
- Updated guidance for the remainder of 2025, including any impacts from tariffs or supply chain adjustments.
AMD’s Q1 2025 earnings are a pivotal moment for the company’s AI and data center ambitions. If AMD delivers on revenue and EPS expectations, and provides reassuring guidance, it could help restore investor confidence and support a recovery in the stock.
However, any disappointments or cautious outlooks-especially regarding China or AI competition-could trigger further downside in AMD shares.