Could Advanced Micro Devices (NASDAQ: AMD be on the road to recovery?
The chipmaker reported its earnings for the first quarter of 2025, and its revenue growth is accelerating, with all but one segment registering improvements. This is welcome news for a stock that trades more than 55% below its high in March 2024.
The semiconductor stock is definitely discounted, but is it worth the bargain price? Let’s take a closer look.
When it comes to revenue, the company reported an overall improvement. In the first quarter of 2025, revenue of $7.4 billion grew 36% from year-ago levels. That is up from the 24% growth from the fourth quarter and the 14% growth for 2024 overall.
That increase also occurred as revenue shrank on an annual basis in two of its four segments. Still, the two growth segments accounted for 80% of AMD’s sales, and thanks to strong demand for AI accelerators and central processing units (CPUs), the company overcame a lagging performance in other parts of its business.
With that revenue growth, it is likely unsurprising that AMD reported $709 million in net income in the first quarter, well above the $123 million earned in the year-ago quarter.
The stock has risen since the announcement, though it trades down more than 30% from its price a year ago.
Amid that decline, investors can buy this stock at a considerable discount. Even though it trades at 76 times trailing earnings, the forward price-to-earnings ratio (P/E) is 26, a low cost for a company whose earnings have accelerated in recent quarters.
Still, the numbers also showed that AMD’s financials are a mixed picture, which could potentially continue to hamper its stock.
The company forecasts revenue between $7.1 billion and $7.7 billion in the second quarter. Although that would mean around 28% revenue growth at the midpoint, it may also lead to a deceleration in its growth rate from the first quarter.
Moreover, even the better-performing segments offered some mixed news. The data center segment, which includes AI accelerators and accounts for about half of AMD’s revenue, saw its growth slowing slightly to 57% annually versus 69% yearly in the prior quarter.
To be sure, 57% growth over 12 months is still impressive. Nonetheless, that segment generated $3.7 billion in revenue, 49% of AMD’s total, meaning it has a considerable impact on the overall company.
DJ Kamal Mustafa
I’m DJ Kamal Mustafa, the founder and Editor-in-Chief of EMEA Tribune, a digital news platform that focuses on critical stories from Europe, the Middle East, Africa, and Pakistan. With a deep passion for investigative journalism, I’ve built a reputation for delivering exclusive, thought-provoking reports that highlight the region’s most pressing issues.
I’ve been a journalist for over 10 years, and I’m currently associated with EMEA Tribune, ARY News, Daily Times, Samaa TV, Minute Mirror, and many other media outlets. Throughout my career, I’ve remained committed to uncovering the truth and providing valuable insights that inform and engage the public.
