Advanced Micro Devices reported a blockbuster 2025 while sending a cautious signal for the first quarter of 2026, a combination that has underscored both the company’s momentum and the fragility of investor optimism in the AI chip era. For the fourth quarter, AMD posted revenue of $10.3 billion, up 34% year‑on‑year, and non‑GAAP net income of $2.52 billion, up 42%, marking record quarterly and full‑year financials. Full‑year revenue reached $34.6 billion, also a 34% increase on 2024, driven by surging data‑centre demand and strong client and gaming sales.
Internally, the numbers were led by a 39% jump in fourth‑quarter data‑centre revenue to $5.4 billion and a 37% rise in client and gaming revenue to $3.9 billion. AMD’s management pointed to record server CPU shipments to cloud and enterprise customers and a historic year‑end share gain in data‑centre CPUs. The company’s embedded business grew more modestly and finished the year slightly down.
Yet market reaction to the outlook was immediate. AMD guided first‑quarter revenue to $9.5–10.1 billion, with the midpoint implying roughly a 5% sequential decline despite a healthy 32% year‑on‑year rise. The guidance included about $100 million in revenue tied to sales of the MI308 accelerator to Chinese customers — a line item that highlights how export controls and geopolitical frictions have begun to complicate AMD’s growth story. Shares slipped in regular trading and plunged more than 7–8% in after‑hours trade as some investors had been expecting a stronger, >$10 billion quarter.
CEO Lisa Su used the earnings call to push a bullish long‑term narrative. She forecast annual data‑centre revenue growth of more than 60% for the next three to five years, projected overall revenue growth above 35% over the same period, and set an ambition for annual EPS above $20. AMD also flagged continued product cadence: the MI450 series is on track for second‑half production and shipment, and a MI500 family built on a 2nm process is slated for 2027.
The interaction between U.S. export restrictions and China sales was front and centre. AMD said 2025 results absorbed roughly $440 million of charges related to inventory and associated costs caused by American limits on exports of the MI308. In Q4, sales of MI308 to Chinese customers were about $390 million; management expects roughly $100 million of China‑related MI308 revenue in Q1 and did not forecast further China‑linked sales beyond that. That partial exposure helped lift near‑term revenue but also adds an episodic, policy‑driven element to future quarters.
For international investors and cloud customers, the report reinforces two realities. First, AMD has real traction in CPUs for servers and PCs and is converting design wins into revenue and market share. Second, the AI‑accelerator market remains contested and geopolitically entangled. While AMD is accelerating its MI series roadmap and collaborating with hyperscalers — including high‑profile partnerships such as with OpenAI — Nvidia still dominates the inference and training landscape, leaving AMD to claw share in an intensely competitive market.
Near term, AMD faces normal semiconductor seasonality, component cost pressures — notably rising memory prices that could shave PC volumes — and the uncertainty of export controls which can create inventory write‑downs and one‑off revenue bumps tied to geographic flows. Long term, the company’s stated ambitions are aggressive: sustaining mid‑30s revenue growth and achieving double‑digit EPS requires both successful MI deployments at scale and continued CPU momentum against Intel and other rivals.
Investors will watch upcoming product launches, customer deployment announcements, and any changes in export policy closely. If AMD executes on MI450 and the 2nm MI500 family while maintaining CPU share gains, the company could credibly expand its role in data‑centre AI beyond niche deployments. Failure to close the performance and ecosystem gap with Nvidia, or renewed policy shocks in China, would cap upside and keep valuations under pressure.