Core Insights - Advanced Micro Devices (AMD) is expected to report Q4 2025 earnings on February 3, 2026, with Wall Street anticipating an EPS of $1.32 and revenue of approximately $9.6 billion, reflecting 21% year-over-year growth in EPS and 25% in revenue [1] - AMD shares have increased by 115% over the past year, significantly outperforming the broader technology sector [1] Financial Expectations - Expected gross margin is 54.5% [1] - Data center revenue is projected to exceed $4 billion [1] - Consensus revenue is around $9.6 billion, with EPS consensus at $1.32 [1] - A meaningful earnings beat would require EPS of at least $1.40 and revenue exceeding $9.8 billion [1] Historical Performance - AMD has beaten or met earnings estimates in six of the past seven quarters, with an average surprise of approximately 8% [1] - In Q3 2025, AMD reported a 10.3% earnings surprise, with earnings of $0.75 compared to an estimate of $0.68 [1] - Q2 2025 saw an exceptional 1,180% earnings beat, with actual earnings of $0.54 against an expected loss [1] Recent Developments - Management guided Q4 revenue to approximately $9.6 billion with a gross margin of 54.5% [1] - The client and gaming segments generated $4 billion in combined revenue, up 73% year-over-year, driven by record Ryzen processor sales [1] - Data center revenue reached $4.3 billion, up 22% year-over-year, fueled by demand for EPYC processors and Instinct AI accelerators from major clients like OpenAI, Oracle, and IBM [1] Analyst Sentiment - HSBC raised its price target for AMD to $335 from $300, citing structural acceleration in server CPU demand driven by AI workloads [1] - Zacks Investment Research noted AMD's stock performance of 107.1% over the past year, compared to NVIDIA's 63.8%, indicating AMD's competitive position in AI accelerators [1] - The average analyst price target is $289.23, suggesting a 17% upside from current levels, with 41 out of 53 analysts rating it as Buy or Strong Buy [1] Potential Stock Movements - Bull case triggers include positive management commentary on MI500 series GPU ramp and data center revenue surpassing $4.5 billion [1] - Bear case triggers involve cautious 2026 guidance and revenue misses below $9.4 billion, particularly in the Data Center segment [1] - Wild cards include potential China export restrictions and broader concerns about AI infrastructure spending [1] Market Confidence - The options market indicates a 91.5% probability that AMD will beat consensus estimates, reflecting strong investor confidence [1] - Analysts are focused on sustaining data center revenue growth above $4.3 billion, which is critical for justifying AMD's premium valuation [1] Valuation Context - AMD trades at 37.31x forward earnings, a premium to the semiconductor sector average, justified by a 60.3% year-over-year earnings growth [1] - The company's PEG ratio of 0.51 suggests that the growth rate supports current multiples, although any guidance disappointment could lead to multiple compression [1]

Quick Read Advanced Micro Devices (AMD) reports Q4 2025 earnings on February 3. Wall Street expects $1.32 EPS on $9.6B revenue. AMD shares gained 112% over the past year. Q3 Data Center revenue hit $4.3B up 22% YoY driven by AI accelerators. HSBC raised its AMD price target to $335 citing structural acceleration in server CPU demand from agentic AI workloads. Investors rethink 'hands off' investing and decide to start making real money Advanced Micro Devices (NASDAQ: AMD) reports FY2025 full-year ...

Core Viewpoint - AMD shares have increased by 31.4% in the past month, outperforming the broader Computer and Technology sector and the Integrated Systems industry, driven by an expanding portfolio, strategic acquisitions, and a strong partner base [1][2]. Group 1: Performance and Growth Drivers - The adoption of fifth-generation EPYC Turin processors and the deployment of Instinct AI accelerators across hyperscalers and enterprises are significant growth drivers for AMD [2]. - AMD's EPYC portfolio has expanded notably, with Google Cloud introducing new virtual machines powered by AMD's 5th Gen EPYC processors, which deliver up to 80% higher throughput per vCPU [5][6]. - The introduction of the EPYC Embedded 9005 Series processors in Q1 2025 has enhanced AMD's presence in the embedded market, offering server-grade performance and energy efficiency [7]. Group 2: Partnerships and Acquisitions - AMD's partnerships with major companies like Alphabet, Oracle, Meta Platforms, and Dell Technologies are crucial for expanding its market presence [8]. - In Q1 2025, Oracle Cloud Infrastructure and Google Cloud increased their use of AMD EPYC CPUs, with Oracle achieving up to 2X performance compared to the previous generation [9]. - AMD's acquisition of ZT Systems aims to strengthen its AI ecosystem and compete with NVIDIA in the AI market, targeting the $500 billion data center AI accelerator market by 2028 [11]. Group 3: Financial Outlook - AMD's Q2 2025 revenue guidance is set at $7.4 billion (+/- $300 million), reflecting a year-over-year growth of approximately 27%, but impacted by export restrictions on GPUs to China [12]. - The Zacks Consensus Estimate for AMD's Q2 2025 earnings is 65 cents per share, down 35% over the past month, indicating a year-over-year decline of 5.80% [13]. - AMD's stock is currently considered overvalued, with a forward Price/Sales ratio of 5.53X compared to the industry's 3.31X [14]. Group 4: Investment Recommendation - Despite AMD's expanding portfolio and strategic partnerships, near-term prospects are challenged by macroeconomic uncertainties and competition from NVIDIA, particularly in the cloud data center and AI chip markets [17]. - The recommendation is to hold AMD stock for now, awaiting a more favorable entry point for investment [18].