AMD Q4 2025 Earnings Spark AI Revenue Doubts
AMD Q4 2025 earnings showed data-center strength, but Q1 2026 guidance and MI308 China shipments prompted analyst questions and pressured shares.
KEY TAKEAWAYS
- Q4 2025 revenue was $10.3 billion led by $5.4 billion data-center sales including $390 million MI308 China shipments.
- Q1 2026 guidance was $9.8 billion ± $300 million and assumes about $100 million MI308 China sales.
- Analysts flagged MI308 China shipments as a potential one-time boost that could mute recurring AI revenue.
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AMD reported strong data-center and client growth in its Q4 2025 earnings, but on Feb. 4, 2026, analysts raised concerns about MI308 China shipments and softer Q1 2026 guidance, casting doubt on the sustainability of AI-driven revenue gains.
Q4 Results and Profitability
AMD said fourth-quarter fiscal 2025 revenue reached $10.3 billion, up 34.0% year-over-year and 11.0% sequentially, driven by its data-center, client, and gaming segments. Data-center revenue rose 39.0% year-over-year to $5.4 billion, increasing 24.0% sequentially as EPYC processors and Instinct MI350 GPUs ramped. The company disclosed about $390 million in MI308 sales to China, which had not been included in prior guidance.
Client and gaming revenue combined for $3.9 billion, up 37.0% year-over-year, with client revenue at $3.1 billion (up 34.0%) and gaming revenue at $843 million (up 50.0%). Embedded revenue totaled $950 million, increasing 3.0% year-over-year and 11.0% sequentially.
For the full fiscal year 2025, AMD reported revenue of $34.6 billion, a 34.0% increase year-over-year. Data-center revenue rose 32.0%, while client and gaming climbed 51.0%. Gross margin was 52.0%, and diluted earnings per share (EPS) reached $4.17, up 26.0% year-over-year.
The company generated $2.1 billion in free cash flow during the quarter, nearly double the prior year. AMD’s board authorized a $3.0 billion share buyback for fiscal 2026. The sale of the ZT Systems manufacturing business was completed before the quarter.
Guidance and China Sales
AMD’s Q1 2026 revenue guidance is $9.8 billion, plus or minus $300 million, implying roughly 32.0% year-over-year growth at the midpoint. This includes about $100 million of MI308 sales to China. Management expects a roughly 5.0% sequential decline in client, gaming, and embedded sales, offset by data-center growth. Non-GAAP gross margin is forecast at about 55.0%.
Management outlined a multi-year ambition for the data-center market, projecting AI revenue to grow about 60.0% annually over three to five years, reaching "tens of billions" by 2027. Total revenue is expected to expand at better than a 35.0% compound annual growth rate over that period. The company also expects semi-custom system-on-chip (SOC) revenue to decline in fiscal 2026, even as EPYC and Instinct adoption and client share gains support strong topline and bottom-line growth.
Analysts acknowledged the quarter’s strength but flagged the China-linked MI308 shipments as a potential one-time boost that could mute the underlying pace of AI revenue growth, prompting reassessments of the near-term outlook.
