Advanced Micro Devices (AMD) reported third-quarter 2025 earnings of $1.20 per share, beating estimates by 2.56%. Revenues of $9.25 billion also surpassed expectations by 6.02%. Data Center revenues grew by 22.3% to $4.34 billion, driven by strong demand for EPYC processors and GPUs. AMD shares were down 2% despite strong performance.
AMD’s partner base, including OpenAI and AWS, is driving growth. OpenAI selected AMD to build 6 GW of next-gen AI computing capacity. AWS launched Amazon EC2 M8a instances with 5th Gen EPYC CPUs. AMD also announced collaborations with Oracle, Cisco, and IBM for AI clusters and quantum computing integration.
AMD saw significant growth in the Client and Gaming segments, with revenues increasing by 46.2% and 181% year over year, respectively. The company launched new processors and AI upscaling technology. Embedded segment revenues declined slightly year over year but increased sequentially, accounting for 9.3% of total revenues.
Non-GAAP gross margin expanded to 54%, with adjusted EBITDA increasing by 28.8% year over year. Operating expenses rose by 41.8% to $2.75 billion. Segment operating income surged for Client and Gaming, while Data Center operating income improved significantly. Embedded segment operating income declined.
AMD’s balance sheet showed strong cash flow and increased investments. Operating cash flow was $1.79 billion, with free cash flow reaching $1.53 billion in the third quarter of 2025. The company returned $89 million to shareholders through its share repurchase program. AMD offered positive guidance for the fourth quarter, expecting revenues of $9.6 billion.
The company specializes in semiconductor products and is positioned for growth in AI, Machine Learning, and IoT markets. With global semiconductor manufacturing projected to double by 2028, AMD’s prospects look promising. Investors can access a free stock analysis report for more information on AMD’s performance and future potential.
Read more at Nasdaq: AMD Q3 Earnings Beat Estimates, Revenues Up Y/Y, Shares Fall