Advanced Micro Devices reported third-quarter revenue and adjusted earnings per share that exceeded Wall Street’s estimates, with a significant beat on the top line. Free cash flow reached a record $1.53 billion, up 208% year over year. Fourth-quarter revenue guidance of $9.6 billion also outpaced analyst consensus estimates.
Despite strong results, Advanced Micro Devices’ stock fell 3.9% in after-hours trading following the release of its third-quarter 2025 report. The decline was likely due to broader market concerns about high stock valuations in the artificial intelligence sector, exacerbated by a well-known hedge fund manager taking bear positions on AI stocks.
AMD’s third-quarter performance showcased impressive growth, with revenue reaching $9.25 billion, a 36% year-over-year increase. Adjusted earnings showed significant gains as well, with GAAP net income rising to $1.24 billion, a 61% increase. The company’s strong results were driven by demand for its EPYC and Ryzen processors and Instinct AI accelerators.
Despite facing challenges in the Chinese market, AMD’s adjusted numbers exceeded expectations, with adjusted EPS of $1.20 beating estimates. The company generated a record free cash flow of $1.53 billion and ended the quarter with significant cash reserves. Segment performance showed growth across key areas, including data center, client, and gaming.
AMD announced major deals with OpenAI and Oracle, highlighting its commitment to the AI space. The company secured a significant agreement with OpenAI to supply GPUs for its AI infrastructure. CEO Lisa Su emphasized the record revenue and profitability in the third quarter, signaling a strong growth trajectory.
Looking ahead, AMD provided a positive outlook for the fourth quarter, with revenue expected to reach $9.6 billion, representing 25% year-over-year growth. The company also aims for an adjusted gross margin of 54.5%. Despite challenges in China, AMD remains focused on driving revenue and earnings growth through its expanding compute franchise and data center AI business.
Read more at Nasdaq: AMD Stock Slips Despite 30% Earnings Growth and Stronger-Than-Expected Guidance