Analyst(s): Olivier Blanchard, Daniel Newman
Publication Date: May 13, 2025
AMD Q1 FY 2025 earnings report highlights strong performance across core segments, driven by robust demand for AI-enabled data center solutions and next-gen client processors. Continued momentum in EPYC and Instinct platforms and the ramp-up of Ryzen CPUs reflect AMD’s execution strength and product leadership across strategic growth areas.
What is Covered in this Article:
- AMD’s Q1 FY 2025 financial results
- EPYC and Instinct momentum driving 57% YoY Data Center revenue surge
- Record ASPs and premium mix lifting Client segment performance (+68% YoY)
- Gaming GPU strength despite semi-custom softness; Radeon 9070 sets new launch records
- Impact of U.S. MI308 export restrictions and AMD’s strategy to offset the $1.5 billion hit
- Q2 FY 2025 guidance, including expected segmental trends and gross margin outlook
The News: Advanced Micro Devices, Inc. (NASDAQ: AMD) reported Q1 FY 2025 non-GAAP revenue of $7.4 billion (+4.4% above consensus estimates), up 36% year-on-year (YoY). Data Center revenue surged 57% YoY to $3.7 billion, led by strong EPYC CPU and Instinct GPU sales. Client and Gaming revenue rose 28% YoY to $2.9 billion, with Client revenue up 68% YoY to $2.3 billion and Gaming revenue down 30% YoY to $647 million. Embedded revenue declined 3% YoY to $823 million. Non-GAAP gross profit rose 40% YoY to $4.0 billion, with gross margin improving two percentage points YoY to 54%. Non-GAAP operating income grew 57% YoY to $1.8 billion (+2% above consensus), representing a 24% operating margin, up three percentage points YoY. Net income was $1.6 billion (+1.5% above consensus), up 55% YoY, while diluted EPS increased 55% YoY to $0.96, which was above street estimates by 1.8%
“We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter, driven by strength in our core businesses and expanding data center and AI momentum,” said Dr. Lisa Su, Chair and CEO of AMD. “Despite the dynamic macro and regulatory environment, our first quarter results and second quarter outlook highlight the strength of our differentiated product portfolio and consistent execution, positioning us well for strong growth in 2025.”
AMD Q1 FY 2025 Financial Results Highlight AI-Led Growth Across Core Segments
Analyst Take: AMD delivered a strong start to FY 2025, with strength across Client and Data Center segments and ongoing AI momentum. While export restrictions present near-term headwinds, the company reaffirmed its full-year guidance, backed by ramping MI300 adoption, robust product execution, and expanding customer engagements.
Broad-Based EPYC and GPU Momentum Anchors Data Center Outperformance
Data Center revenue rose 57% YoY to $3.7 billion, driven by strong adoption of 4th and 5th Gen EPYC CPUs across hyperscalers and enterprises. AMD launched over 30 new cloud instances during the quarter, including Turin-based and FPGA-accelerated variants via AWS, Oracle, Google, and Tencent. EPYC-powered instances used by Forbes 2000 firms more than doubled YoY, with traction across streaming, financials, and social platforms. On-premise EPYC CPU sales also rose at a strong double-digit pace YoY for the seventh straight quarter, supported by public sector, energy, auto, and semiconductor demand. (AMD now serves all top 10 telecom, aerospace, and semi firms, and nine of the top 10 automakers in the Forbes 2000 list.) Over 150 Turin platforms are expected to ramp via OEMs, including Dell, Cisco, HPE, Lenovo, and Supermicro.
Complementing CPU strength, AMD’s Data Center GPU revenue also posted robust growth, led by continued MI300 adoption across more than 35 production platforms and new Tier 1 AI wins. MI350 sampling has begun, with Oracle committing to a multi-billion-dollar MI355x rollout under an expanded Oracle Cloud Infrastructure (OCI) deal. Combined CPU and GPU momentum positions AMD for sustained share gains in compute and AI workloads.
Client and Gaming Strength Anchored by ASP Upside and Premium Mix
Client revenue surged 68% YoY to $ 2.3 billion in Q1 FY 2025, supported by record ASPs amid a richer mix of high-end Ryzen CPUs. Desktop channel sellout rose over 50% YoY, with AMD setting regional sellout records as the 16-core Ryzen 9950X3D and other latest-gen chips gained popularity among gamers.
In Gaming, Radeon GPU sales stood out despite a 30% YoY decline in Gaming revenue due to lower semi-custom shipments.
Quick zoom-in: The new Radeon 9070 achieved first-week sellout rates 10x higher than any prior Radeon product, in great part due to its superior 1440p gaming performance and performance-to-price ratio. Also making it a potent alternative to Nvidia’s RTX 5070: 16GB of GDDR6 memory (against the RTX 5070’s 12GB of GDDR7) for better high-resolution gaming experiences, a wider 256-bit memory bus (delivering higher bandwidth for memory-intensive games), higher frame rates in pure rasterization (non-ray tracing) games, and FSR 4 (FidelityFX Super Resolution 4) upscaling’s performance advantages (currently applicable to 30 games), also providing additional future-proofing. Despite these advantages, AMD’s discrete GPU sales struggled to gain traction against Nvidia, whose RTX 50 series remains dominant, but the RX 9070’s popularity with gamers bodes well for AMD’s market share ambitions in the gaming segment, moving forward.
Note that AMD’s 30% (YoY) decline in Gaming revenue is primarily the result of weak gaming console sales: PlayStation and Xbox sales slowed in Q1 2025, resulting in softness in semi-custom chip orders. On a more macro level, the gaming hardware market’s upgrade cycle is also moving more slowly than the non-gaming PC refresh cycle, with gamers tending to hold on to their GPUs as long as possible. However, AMD’s new GPUs could help accelerate upgrades if their price-to-value continues to drive excitement in the market.
On the commercial front, Ryzen Pro sales rose a very strong 30% YoY, underpinned by new customer wins and an 80% YoY rise in AMD-powered commercial PC offerings from HP, Lenovo, Dell, and Asus. AMD expects desktop and commercial demand to remain above seasonal levels in Q2 FY 2025, with premium positioning, ongoing share gains in enterprise and gaming anchoring its targeted outperformance compared to the broader PC market, and excitement around new AI-enabled PCs and the transition to Windows 11.
Export Curbs Create Headwinds, But Broader AI Demand Remains Resilient
New U.S. restrictions on MI308 exports to China are expected to create a drag on AMD’s data center performance, with management citing a $700 million revenue impact for Q2 FY 2025 and an estimated full-year hit of $1.5 billion. Nonetheless, management pointed to strong global AI infrastructure demand, highlighting momentum in ex-China MI325/MI300 engagements and the ongoing ramp of the MI350 series. AMD remains focused on sovereign AI deployments and broader geographic expansion to offset geopolitical risks. While trade headwinds persist, the company’s deepening AI portfolio and diversified customer base position it to manage the disruption effectively.
Guidance and Final Thoughts
For Q2 FY 2025, AMD guided revenue of ~$7.4 billion (+27% YoY at midpoint), though a ~$700 million headwind from restricted MI308 exports to China is expected to weigh on Data Center GPU revenue. Non-GAAP gross margin is forecast at ~43%, including an ~$800 million inventory charge, with adjusted gross margin at ~54%. Despite near-term disruptions, AMD reaffirmed its expectation for full-year double-digit Data Center GPU growth, underpinned by the ramp of MI350 and broader AI infrastructure deployments. With a diversified AI roadmap and global cloud traction, AMD appears well-positioned to navigate geopolitical risks and maintain its competitive trajectory.
See the complete press release on AMD’s Q1 FY 2025 results on the AMD investor website.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
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Author Information
Research Director Olivier Blanchard covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
