AMD 1Q 2025 earnings preview: What to expect

When does Advanced Micro Devices (AMD) report earnings?

AMD is set to release its quarter one (Q1) 2025 financial results on 6 May 2025 after US market closes.

AMD’s Q1 2025 results – what to expect

AMD’s Q1 2025 revenue is projected to rise 30.2% year-on-year (YoY) to US$7.13 billion, up from US$5.47 billion in the same period last year. This would mark the fourth consecutive quarter of accelerating growth, following a 24.2% increase in Q4 2024.

Earnings per share (EPS) are expected to climb 52.1% YoY to US$0.94, up from US$0.62 a year earlier, and represent its strongest EPS growth since Q2 2022. Gross margin is also forecast to improve to 53.75%, compared to 52.0% in the prior year.

AMD has underperformed the semiconductor sector and broader Nasdaq

Over the past year, AMD's share price has declined 33%, significantly lagging the Nasdaq Composite’s 13.5% gain and underperforming the iShares Semiconductor exchange traded fund (ETF) (SOXX), which fell 11.2% over the same period. This relative weakness reflects investor concerns around execution risks and competition in the artificial intelligence (AI) computing space.

From a valuation standpoint, AMD trades at a moderate premium to its semiconductor peers, with a P/E of 29.11 and an EV/EBITDA of 27.43—above the sector average but still below Nvidia’s elevated multiples. The premium suggests that market participants harbour hopes for AMD’s long-term AI potential and future growth, though expectations remain more measured compared to the valuations of some peers.

Watch AMD’s data centre segment—A critical growth engine

Data centre revenue is crucial for AMD, as it accounts for over half of its total revenue. In Q4 2024, AMD's data centre revenue grew 69.1% to $3.9 billion, driven by strong Instinct GPU shipments and robust EPYC CPU sales. However, it fell short of the $4.14 billion market consensus, resulting in a 6% drop in its share price post-results.

AMD remains optimistic about its growth prospects, stating that its EPYC CPUs now hold a market share above 50% among hyperscalers. The company also noted that Microsoft and Meta Platforms are using its MI300X GPUs, and strong demand is expected for its next-gen MI350 series GPUs, set for release mid-year.

Market participants will be watching closely for these positive rhetorics to translate into actual growth numbers, with a 54.9% year-on-year increase expected for Q1 2025 data centre revenue. Failing to meet these expectations could result in significant downside risk for its share price, similar to the post-4Q 2024 earnings reaction.

Market share gains key to AMD’s long-term share price performance

Gaining market share—particularly in AI chips—will be critical to AMD’s long-term equity performance. Investors will continue to track AMD’s ability to challenge Nvidia’s dominance in the discrete GPU and AI accelerator space. According to Jon Peddie Research, Nvidia lost roughly 8% of its discrete GPU market share in Q4 2024, yet still commands an overwhelming 82%, compared to AMD’s 17%. Any further gains by AMD will be closely watched as a potential catalyst for share price upside.

Meanwhile, data from Canalys shows a 9% increase in global PC shipments in Q1 2025, which may offer a lift to AMD’s client segment—its second-largest revenue contributor, comprising desktops and laptops. This recovery is notable after a prolonged post-COVID softness in consumer demand.

With that, AMD’s client revenue is expected to surge 50.8% year-on-year in the quarter. However, growth momentum may face headwinds going forward, as US tariffs may threaten to dampen demand and pressure margins. Management guidance will be key in providing reassurances and anchor investor confidence.

Management’s view on US tariff risks in focus

AMD’s exposure to Taiwanese and Chinese suppliers—particularly for chip packaging and testing—may expose its hardware supply chain to risks from US tariffs. This could lead to higher input costs and business disruptions. Geopolitical tensions also raise the risk of tighter US export controls, which may further restrict AMD’s ability to sell high-end AI hardware into China. Such developments could undermine AMD’s momentum in scaling its global data centre business, particularly across Asia. As such, management’s view will be crucial in addressing such concerns at the upcoming earnings call.

Technical Analysis—Short-term upside momentum but more needed for trend reversal

AMD’s share price has retraced as much as 66% from its March 2024 peak, as it has been trying to catch up with Nvidia in the AI computing space while struggling to meet lofty investor expectations. A recent rebound in risk sentiment has supported a recovery from the US$76 level, with the stock now holding above the mid-point of a broader descending channel.

Momentum indicators have turned more constructive—moving average convergence divergence (MACD) has formed a bullish crossover, and the daily relative strength index (RSI) has recovered to the neutral 50 mark. Still, the price remains below the Ichimoku Cloud and long-term moving averages (MA), keeping the broader trend bearish.

A sustained break above the US$115–120 resistance zone—where the cloud and upper channel converge—would be needed to signal a trend reversal. Until then, the recovery appears corrective, with downside risks of a retest of the US$76 level or even the US$60 region if resistance fails to break.