From Nasdaq: 2025-02-08 05:05:00

Advanced Micro Devices (NASDAQ: AMD) saw a dip in shares after Q4 earnings, with data center revenue below expectations. Despite a 35% drop in stock price over the year, Q4 revenue rose 24% to $7.66 billion. AMD’s data center revenue hit $3.9 billion, with EPYC CPUs gaining market share.

AMD’s strong Q4 performance saw data center revenue up 69% and client revenue up 58%. While GPU sales fell 59% due to inventory normalization, AMD’s market share in CPUs continues to grow. Adjusted EPS soared 42% to $1.09, beating analyst expectations.

The company’s gross margins rose 320 basis points to 54%, showing increased profitability. Free cash flow for the quarter hit $1.1 billion, with $2.4 billion for the full year. Q1 revenue guidance of $6.8 billion to $7.4 billion signals further growth.

Investors debate whether AMD is a worthwhile investment, with concerns about competing with Nvidia in the GPU market. However, AMD’s strong position in CPUs and projected EPS growth of 41% make it an attractive option. With a forward P/E of under 24 times 2025 estimates, AMD’s valuation is appealing.

The Motley Fool Stock Advisor team did not include AMD in their top 10 stock picks, citing better options for investors. However, AMD’s growth in CPUs and solid financials make it a potential buy. Consider Stock Advisor’s track record of outperforming the S&P 500 since 2002.



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