AMD Q3 Preview — What can we expect?

Introduction
Advanced Micro Devices, known as AMD, is publishing its quarterly report for the third quarter of 2025 today, which will be released after the market closes. The report will provide investors with key insights into the company’s development, with a particular focus on the rapidly growing artificial intelligence accelerator segment. Over the past two months, AMD has signed significant agreements with OpenAI and Oracle for the delivery of large volumes of its latest AI chips, highlighting the growing importance of this area in the company’s strategy and confirming its ability to effectively compete with the market leader, Nvidia. This is laying the foundation for a long-term investment cycle in the semiconductor industry, projected through 2030.

In the third quarter, the data center segment is expected to generate approximately $4.14 billion in revenue, while total company revenue is projected at around $8.74 billion, with a gross margin of 54%. Planned capital expenditures reach $220 million, and research and development spending is close to $2 billion, reflecting AMD’s commitment to innovation and maintaining technological leadership. The new MI450 chip could provide a significant boost for future growth, while stable results in traditional servers and the client and gaming segments support positive expectations for the report.

Key Financial Highlights (Q3 2025)

• Revenue: approximately $8.74 billion (+28% YoY)

• Earnings per share (EPS): $1.17 (+27% YoY)

• Gross margin: approximately 54%

Data Center Segment:

• Revenue: approximately $4.14–4.2 billion (+17.6% YoY)

• Growth is driven by EPYC processors and MI350/MI450 chips. Increased MI450 production supports further expansion.

Client & Gaming Segment:

• Revenue: approximately $3.6 billion (+29% YoY)

• Strong results driven by Ryzen Zen 5 processors, RDNA 4 graphics cards, and SoC solutions for consoles.

Embedded Segment:

• Revenue: approximately $889–927 million (-25% YoY)

• Decline due to a slowdown in the telecom and industrial sectors, but investment in FPGA and IoT continues.

• Capital Expenditures (CapEx): approximately $219–220 million

• R&D: nearly $2 billion

• Free Cash Flow: approximately $1.28 billion

• Adjusted Operating Income: approximately $2.15 billion

• Adjusted Operating Margin: approximately 24.8%

Q4 2025 Forecast

• Revenue: $9.2 billion

• Gross Margin: approximately 51.5%

• CapEx: $902.3 million

Market Expectations and Stock Performance

AMD shares are trading near all-time highs, surpassing $250, reflecting a significant increase in the company’s value this year. Investors are closely monitoring whether the company will meet its projections, especially in the key AI and data center segments, where competition with Nvidia is particularly intense. Traditional PC and gaming markets remain stable and continue to provide an important source of revenue.

Strategic Outlook
AMD is focused on strengthening its leadership position in AI and data centers through the development of MI350 and MI450 chips and EPYC processors. Partnerships with companies such as OpenAI, Oracle, and Microsoft enable the rapid deployment of new solutions and the capture of additional market share. The client and gaming segment continues to play a key role in revenue diversification, supported by the popularity of Ryzen Zen 5 processors, RDNA 4 graphics cards, and SoC solutions for consoles. Significant investments in research and development aim to maintain technological leadership and competitiveness.

Risks and Challenges
Key risks include export restrictions to China, which could limit sales in the AI and data center segments. Fluctuations in demand in the gaming and PC markets may affect financial results, and the high stock valuation increases sensitivity to negative news.

Macroeconomic and Market Context
AMD’s operations depend on global macroeconomic factors, including inflation, currency fluctuations, and geopolitical tensions, particularly regarding export restrictions between the U.S. and China. The semiconductor market remains highly competitive, with Intel dominating the CPU segment and Nvidia maintaining an advantage in AI and data centers. Regulatory and political decisions will significantly influence the company’s future prospects.

Conclusion
The third-quarter 2025 report will be a critical test of AMD’s ability to sustain dynamic growth in the high-potential AI and data center segments while maintaining stability in PC and gaming markets. Meeting forecasts, effectively managing geopolitical and cost-related risks, continuing technological development, and leveraging strategic partnerships will be key to maintaining AMD’s position as a leading player in the semiconductor industry.