AMD Shares Lose Aftermarket Gains Despite The Firm Surpassing Analyst Q1 2025 Estimates
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AMD has reported its earnings report for the first quarter of 2025. Ahead of reports, analysts had expected the firm to earn 94 cents in earnings and $7.13 billion in revenue. AMD beat the figures as it posted 96 cents EPS and $7.44 billion in revenue. Crucially, for the current quarter, analysts had expected the firm to guide 86 cents EPS and $7.25 billion in revenue, and the firm topped revenue estimates by guiding $7.4 billion. The firm, like Apple, also added the impact of trade tensions on its revenue as it outlined that it would experience $800 million in costs due to limited exports of AI chips.
AMD Beats Analyst Estimates For Revenue And Profit In Q1 2025
AMD’s shares surged by as much as 5.5% after the earnings before trimming their gains to 3.8%. AMD’s most important segment, its data center segment, clocked in $3,7 billion in sales, which marked 57% annual growth that the firm attributed to its data center CPUs and GPUs. AMD has capitalized on Intel’s weakness in the CPU space and has continually gained market share over its larger rival.
Additionally, AMD’s client computing segment also marked a 28% annual growth in revenue. The growth came primarily on the back of the firm’s Zen 5 processors as its gaming GPUs continued to struggle. During the first quarter, AMD sold $2.3 billion in CPUs for a sizable growth over the year-ago quarter’s $1.4 billion revenue. However, on the gaming GPU side, the firm raked in $600 million in revenue for a $300 million drop over the year-ago figures.
Overall, AMD posted $7.4 billion in revenue, which marked a strong 36% annual growth and set a new record for its quarter. Newer Ryzen processors with higher prices enabled the firm to grow its gross margins as well, with the latest figures sitting at 50% on a GAAP basis and 54% on a non-GAAP basis.
AMD’s operating income also marked significant growth, with the GAAP figures clocked at $800 million and the non-GAAP figures at $1.8 billion. AMD’s gross profit jumped by 46% annually on a GAAP basis and touched $3.7 billion. For the data center segment, AMD’s partnership with Oracle to deploy data center accelerators and EPYC processors contributed to the revenue growth.
For the current quarter, AMD guided $7.4 billion in revenue and 43% gross margin following a $800 million in an inventory charge due to US restrictions on AI GPU export. Without the charge, the firm expects that its gross margin will be 54% to remain at levels during the previous quarter. The shares trimmed back all their aftermarket gains following the firm’s earnings call.
