AMD(US:AMD) Huachuang Securities·2025-05-13 13:29Investment Rating - The report assigns a positive outlook for AMD, indicating strong growth potential in the upcoming quarters, particularly in the data center and client segments [1][4]. Core Insights - AMD's FY2025 Q1 revenue reached $7.4 billion, representing a 36% year-over-year increase, driven by growth in data center, client, and gaming segments [2][7]. - The GAAP gross margin was 50%, up 3 percentage points year-over-year, while the Non-GAAP gross margin was 54%, up 2 percentage points year-over-year [2][7]. - Non-GAAP EPS was reported at $0.96, slightly above market expectations of $0.94 [2][7]. Business Segment Summary Data Center Segment - Revenue for the data center segment in FY2025 Q1 was $3.7 billion, a 57% year-over-year increase, attributed to growth in cloud computing and enterprise CPU server market share, along with strong performance from AMD Instinct GPUs [3][8]. - The operating profit margin for this segment was 25%, an increase of 2 percentage points year-over-year, with operating profit reaching $932 million, up from $534 million in the same period last year [3][8]. Client and Gaming Segment - The client and gaming segment generated $2.9 billion in revenue, a 28% year-over-year increase. Client revenue was $2.3 billion, up 68% year-over-year, driven by strong demand for the latest AMD Ryzen Zen 5 processors [3][9]. - Gaming revenue was $647 million, down 30% year-over-year, primarily due to a decrease in semi-custom business revenue [3][9]. - The operating profit margin for this segment was 17%, up 7 percentage points year-over-year, with operating profit of $496 million, compared to $237 million in the previous year [3][9]. Embedded Segment - The embedded segment reported revenue of $823 million, a 3% year-over-year decline, with an operating profit margin of 40%, down 1 percentage point year-over-year [3][10]. Performance Guidance - AMD expects FY2025 revenue to be between $73.7 billion and $74.3 billion, with a gross margin forecast of 43%, which includes an $800 million one-time inventory charge. Excluding this charge, the gross margin is expected to be 54% [4][11].