Takeaways by Saasverse AI
- $9.25B Revenue (+36% YoY) | $1.24B Net Income | Record-Free Cash Flow $1.53B (+208% YoY).
- Data Center Revenue: $4.34B (+22% YoY), fueled by EPYC CPUs and AI GPU demand (Instinct MI350).
- Key Highlights: Stock down 4% post-earnings; OpenAI partnership; Q4 guidance surpasses expectations ($9.6B midpoint).
AMD has delivered a stellar performance in the third quarter of 2025, reporting record-breaking revenue of $9.25 billion, a 36% year-over-year increase, and a net income of $1.24 billion. These figures surpassed Wall Street's expectations, underscoring the company's robust growth trajectory across its core product lines. Free cash flow more than tripled to $1.53 billion, showcasing the company’s operational efficiency. However, despite the strong results, AMD's stock slipped over 4% in after-hours trading, reflecting investor caution amid intensifying competition in the AI chip market.
At the core of AMD’s outstanding performance was the surging demand for its data center products, with revenue in this segment climbing 22% year-over-year to $4.34 billion. The growth was driven primarily by its EPYC processors and the Instinct MI350 series AI GPUs, which continue to gain traction in both enterprise and cloud applications. Additionally, the client segment achieved a record-breaking $2.75 billion in revenue, marking a 46% year-over-year increase, supported by the recovery in the PC market. Meanwhile, the gaming division saw a massive 181% surge in revenue to $1.3 billion, aided by strong console and semi-custom chip sales.
CEO Lisa Su emphasized the company’s growth momentum, stating, “Our record revenues and profitability this quarter reflect the robust demand for our EPYC, Ryzen, and Instinct AI accelerators across diverse markets.” Su also highlighted AMD’s optimistic outlook for Q4, projecting revenues of approximately $9.6 billion, significantly above analysts’ expectations of $9.2 billion. This guidance reflects confidence in sustained demand for its AI and cloud offerings.
AMD’s strategic collaborations during the quarter further solidify its position in the AI and cloud ecosystems. The company signed a landmark GPU supply agreement with OpenAI, valued at 6 exaflops of compute capacity, while OpenAI is set to acquire a 10% stake in AMD. In addition, AMD partnered with Oracle to build a public AI supercluster powered by its "Helios" rack design, with an initial deployment of 50,000 GPUs. Other notable deals included a collaboration with IBM for AI infrastructure development and a $1 billion supercomputing project with the U.S. Department of Energy.
Despite these achievements, AMD faces challenges in convincing investors of its ability to compete effectively with NVIDIA in the AI chip market. NVIDIA continues to dominate with its H100 GPUs, leaving AMD with the task of proving the scalability and performance of its Instinct line in high-demand AI workloads. However, AMD’s ability to secure partnerships with major players like OpenAI and Oracle suggests its strategy is resonating in the market.
Saasverse Insights
AMD’s Q4 guidance of $9.6 billion (± $300 million) represents a significant step-up from the prior quarter, bolstered by anticipated growth in AI and data center revenue streams. While competition in the AI chip market remains fierce, AMD’s expanding product portfolio and strategic alliances position it well for continued long-term growth.