Advanced Micro Devices (AMD) is set to report Q3 2025 earnings after the close today, riding a wave of investor optimism around its AI accelerator roadmap, rising EPYC CPU adoption, and the continued PC market recovery. With shares up 115% year to date, the bar is high, and the market will be watching closely for updates on MI300 ramp progress, gross margins, and forward guidance amid China export headwinds and mounting competition from Nvidia and Intel.
Wall Street expects another strong quarter, driven by data centre tailwinds and normalisation in the consumer and gaming segments. But after a sharp rally, the pressure is on for AMD to not only meet expectations but deliver clear visibility into its long-term AI growth path.
Street Forecast: Revenue Near $8.76B, EPS at $1.17
| Metric | Q3 2025 Consensus | Q3 2024 Actual | YoY Growth |
|---|---|---|---|
| Revenue | ~$8.76 (5) billion | $6.82 billion | +28% |
| Adjusted EPS | ~$1.17 | $0.92 | +27% |
| Gross Margin (non-GAAP) | ~54% | 51% | +3 pts |
AMD previously guided revenue to $8.6B–$8.9B and non-GAAP gross margin near 54%. Consensus sits at the midpoint, implying strong momentum in the Data Centre and Client segments.
Prediction: AMD beats slightly on revenue and EPS. Guidance tone will determine post-earnings stock reaction.
Data Center: All Eyes on MI300 and EPYC Momentum
The Data Center segment remains AMD’s biggest near-term growth driver.
- MI300/MI350 AI GPUs: The MI300A/X ramp continues, with AMD now shipping MI350X — its next-gen GPU aimed at challenging Nvidia’s B200. Performance parity claims have impressed analysts, though software ecosystem remains a hurdle.
- EPYC CPUs: 5th-gen “Turin” chips continue to gain share among hyperscalers, with strength in cloud and enterprise deployments.
- AMD expects AI/Data Center revenue to accelerate into Q4 as MI350 capacity expands and hyperscaler demand strengthens.
Prediction: Data Center revenue grows 18–20% YoY, with strong EPYC traction and early-stage MI350 GPU revenue.
Client (PC): Upgrade Cycle and Ryzen AI Tailwinds
The global PC market returned to growth in Q3 — IDC and Gartner report ~8% YoY shipment growth, driven by Windows 10 refresh and early interest in AI PCs.
- AMD’s Client segment surged 67% YoY in Q2 and is expected to remain strong.
- Ryzen 9000 series and AI-enhanced Ryzen AI 300 laptop chips are gaining share, especially in high-end consumer and business markets.
Prediction: Client revenue up 30–35% YoY, reflecting continued desktop and mobile CPU share gains.
Gaming: Console Stability, Radeon Still Lagging
Gaming revenue jumped 73% YoY in Q2, but growth is expected to moderate:
- Console chip demand (PlayStation 5, Xbox Series X|S) remains solid but cyclical.
- Radeon GPUs have underperformed vs. Nvidia’s GeForce RTX line, though new SKUs (e.g., RX 9060 XT) offer upside.
Prediction: Gaming revenue roughly flat YoY. Console momentum offsets softer PC GPU sales.
How Advanced Micro Devices makes and spends money Based on the latest reported earnings on an LTM basis
Embedded: Bottoming Out?
Embedded revenue declined 4% in Q2 and remains the weakest segment:
- Industrial and telecom demand is mixed.
- AMD is pushing new Xilinx-powered SoCs and Versal FPGAs into automotive, defense, and robotics markets.
Prediction: Embedded revenue flat to slightly positive YoY.
Competitive Landscape: CPU Gains, GPU Catch-Up
- vs. Intel: AMD continues to take share in client and server CPUs. EPYC now holds nearly 50% of server share by units.
- vs. Nvidia: Nvidia dominates the AI accelerator space (~90%+ share). AMD’s MI300/MI350 are the first true contenders, but adoption and ecosystem maturity remain headwinds.
Prediction: Analysts see AMD as closing the gap on Nvidia in hardware, but CUDA and developer lock-in still favor Nvidia in the near term.
Margins and Profitability: Rebounding from China Hit
Q2 margins were hit by an $800M inventory write-down tied to export restrictions on MI308 shipments to China. That’s now behind them:
- Gross margin is guided at 54%, up from 43% in Q2 (ex-China write-down, ~54%).
- R&D and AI investments remain high, but AMD remains free-cash-flow positive and GAAP-profitable.
Prediction: Margins stabilize at 54%+, with strong leverage in Data Center and Client.
Macro and Geopolitics: A Manageable Drag
- China export rules remain a revenue drag (~$1.5B full-year hit from MI308 restrictions).
- Enterprise and cloud spending are strong, especially for AI infrastructure.
- U.S. CHIPS Act benefits, EU subsidies, and industry-wide capex are tailwinds.
Prediction: No new macro shocks in Q3, but China commentary will remain a watchpoint.
Analyst Sentiment: Bullish but Priced In?
- 29 Buys, 10 Holds; average PT: ~$252 (current price ~$248).
- Price targets stretch to $300 (Jefferies, Barclays), citing AI upside.
- Forward P/E ~75×; P/S ~16× — one of the most expensive in semis.
Prediction: Street bullish on fundamentals but increasingly wary of valuation stretch.
Can AMD Justify Its AI-Driven Run?
AMD is executing well in servers, PCs, and AI — but expectations are high and valuation is full. Investors want:
- Clear signs that MI350 is winning deals
- Margin expansion without more one-offs
- Confident guidance into Q4 and FY2026
Our Call: AMD delivers a modest beat and affirms guidance, but upside may be capped without bullish AI commentary. Expect a 3–6% move post-earnings, skewing positive if MI350 traction is highlighted.
Disclosure: All predictions and insights shared in this article are based on a comprehensive review of publicly available analyst reports, media coverage, and market consensus. These views are for informational purposes only and do not constitute investment advice. Please conduct your own research or consult a licensed financial advisor before making any investment decisions.
