AMD Q2 FY2025 Earnings Preview: AI and Data Center Growth Prospects in Focus

TradingKey - Advanced Micro Devices, Inc. (NASDAQ: AMD) is scheduled to report its Q2 FY2025 earnings on Tuesday, August 5, 2025, after the U.S. market closes. The earnings call will begin at 5:00 p.m. Eastern Time.

Market Forecast

Source: AMD, Seeking Alpha, TradingKey

Where Investors Should Watch

Data Center and AI Growth: AMD’s Data Center segment is expected to remain the primary engine of growth, driven by fifth-generation EPYC Turin processors and Instinct GPU accelerators. Attention should be given to updates regarding the rollout of the Instinct MI350 series and the strategic impact of the pending ZT Systems acquisition on AMD’s AI infrastructure. With hyperscalers such as AWS, Google Cloud, and Oracle scaling AI workloads, commentary on market share gains against Nvidia and potential supply chain bottlenecks for GPUs or server components will be particularly important.

Revenue Growth vs. Profitability: Revenue is forecasted to increase by approximately 27% YoY, while adjusted EPS is expected to decline. This divergence is likely due to higher investments in AI technologies, increased operating expenses, and shifts in product mix toward emerging AI accelerators like the MI355. Understanding how AMD manages the balance between growth investments and margin pressures will be key, especially in light of prior trends showing growing operating leverage alongside compressed near-term earnings.

Client & Gaming Segments: The Client and Gaming divisions, historically significant contributors, are anticipated to sustain positive revenue trends, supported by high-end Ryzen CPUs and new client products. Close observation of any signs of demand softness or weakness in these segments is warranted, as they influence AMD’s overall margin profile and business diversification.

R&D and Capital Allocation: Continued elevated spending on research, development, and strategic AI initiatives is shaping AMD’s long-term growth potential but may exert pressure on near-term margins. Guidance on how these investments are expected to translate into new products, pipeline strength, and profitability outlooks remains a critical area to monitor.

Conclusion

For AMD’s Q2 FY2025 earnings, investors should prioritize management’s guidance on Data Center growth, AI accelerator adoption, and strategies to navigate export controls. Strong Data Center performance and positive updates on MI350 series production could bolster confidence. However, risks include margin compression from the inventory charge and competitive pressures from Nvidia and Intel. Maintaining exposure into earnings is reasonable, but investors should be cautious of guidance indicating prolonged export control impacts or Data Center growth below expectations. Conversely, signals of accelerated AI partnerships or easing regulatory headwinds could support a bullish outlook, reinforcing AMD’s position in the AI and high-performance computing markets.

Get Started