AMD(US:AMD) ZACKS·2025-05-02 20:00Core Viewpoint - Advanced Micro Devices (AMD) is expected to report first-quarter 2025 results on May 6, with projected revenues of $7.1 billion, indicating a year-over-year growth of approximately 30% and a sequential decline of about 7% [1] Revenue Estimates - The Zacks Consensus Estimate for AMD's first-quarter revenues is $7.12 billion, suggesting a year-over-year growth of 30.11% [2] - The consensus estimate for first-quarter earnings is 93 cents per share, reflecting a year-over-year growth of 50% [2] Segment Performance - AMD's data center segment is anticipated to see significant revenue growth, driven by strong sales of EPYC processors and demand for AI applications, with first-quarter revenues estimated at $3.4 billion, a year-over-year increase of 47.5% [5] - The client segment is also expected to grow, with revenues projected at $2.04 billion, indicating a year-over-year growth of 49.3% [6] - However, the embedded and gaming segments are expected to decline, with embedded revenues estimated at $570 million (a 0.9% decline) and gaming revenues at $509 million (a 38.1% decline) [7] Stock Performance - AMD shares have decreased by 17.9% year-to-date, underperforming the Zacks Computer and Technology sector's decline of 9% and the Computer – Integrated Systems industry's decline of 7.2% [8] Valuation Metrics - AMD's current valuation is considered stretched, with a forward 12-month price/sales ratio of 4.68X, compared to the industry average of 2.90X [11] Strategic Partnerships - AMD benefits from a strong partner base, including major companies like Microsoft, Oracle, Dell Technologies, and IBM, which enhances its market position [14] - The demand for AI accelerators, particularly the Instinct MI300 series, is expected to continue growing, further boosting data center revenues [15] Conclusion - AMD's expanding portfolio and strategic acquisitions are likely to improve top-line growth despite weaknesses in the embedded and gaming segments and competition from NVIDIA [18]