AMD is breaking records, but Wall Street is wary of margins

"AMD posted strong results again in the third quarter of 2025, but the stock market reacted cautiously. The American chip company reported record revenue of $9.25 billion, up 36 percent from a year earlier, and net income of $1.24 billion. Adjusted earnings per share came in at $1.20, slightly above analysts' expectations of $1.16. Despite the better-than-expected results, the stock fell more than 3 percent in after-hours trading, after losing nearly 4 percent earlier in the day."

"Investors were particularly disappointed by the outlook for gross margin, which is expected to be around 54.5 percent in the fourth quarter, virtually in line with market expectations. On the other hand, the revenue outlook is strong: AMD expects to generate approximately $9.6 billion, representing year-on-year growth of around 25 percent and exceeding the consensus of $9.15 billion."

"According to CEO Lisa Su (photo), the quarter reflects broad demand for AMD's Epyc and Ryzen processors, as well as growing interest in Instinct AI accelerators. She sees the results as an important step in the company's growth trajectory, with the data center and AI divisions remaining the biggest drivers. CFO Jean Hu emphasized that AMD not only achieved record revenue, but also its highest free cash flow to date."

AMD reported record third-quarter revenue of $9.25 billion, a 36 percent increase year-on-year, and net income of $1.24 billion. Adjusted EPS was $1.20, slightly above analysts' $1.16 estimate. The stock fell more than 3 percent in after-hours trading after earlier declines. Gross margin is expected to be around 54.5 percent in the fourth quarter, roughly matching market expectations. Revenue guidance for Q4 is approximately $9.6 billion, about 25 percent year-on-year growth and above consensus. Strong demand for Epyc and Ryzen processors and growing interest in Instinct AI accelerators drove results. Data center revenue reached $4.34 billion, up 22 percent, while operating margins declined to 25 percent.

Read at Techzine Global