AMD's Q4 Results: Is the Chip Giant's Growth Slowing?

2026-02-09 companies

Santa Clara, Monday, 9 February 2026.
AMD’s Q4 2025 earnings face market skepticism despite a 34% revenue increase, with analysts pointing to increased competition and slower data center spending. AMD shares experienced their worst loss in nearly a decade.

AMD’s Financial Performance in Q4 2025

Advanced Micro Devices (AMD), ticker symbol AMD, reported a substantial 34.1% year-over-year increase in revenue for Q4 2025, reaching $10.27 billion, exceeding analyst estimates by 6% [5][7]. The adjusted Earnings Per Share (EPS) was $1.53, surpassing analyst predictions by 16% [7]. Furthermore, the adjusted EBITDA stood at $3.05 billion, with a 29.7% margin, outperforming analyst estimates by 27.4% [7]. Despite these achievements, the market’s response was muted, with concerns arising about future growth prospects [1].

Segment Performance and Future Outlook

AMD’s Data Center segment saw a 39% year-over-year increase in revenue, reaching a record $5.4 billion in Q4 2025 [5]. The Client and Gaming segment also experienced growth, with a 37% year-over-year increase, reaching $3.9 billion [5]. However, not all segments performed equally; the Embedded segment only saw a 3% increase in revenue [5]. Looking ahead, AMD anticipates Q1 2026 revenue to be approximately $9.8 billion, including $100 million from MI308 sales to China, with a non-GAAP gross margin of approximately 55% [5].

Market Concerns and Valuation

Despite solid Q4 2025 results, AMD’s stock faced pressure, with one article noting the shares experienced their worst loss in nearly a decade [6]. This downturn reflects investor concerns about AMD’s ability to make significant AI breakthroughs and intensifying competition in the CPU and GPU markets [1][6]. As of February 8, 2026, AMD’s stock price was $208.71, implying a valuation ratio of 28.8x forward P/E [7]. While this is a premium valuation, analysts at Wall Street maintain a consensus one-year price target of $288.50, suggesting a potential 38.2% upside [7].

Strategic Moves and Financial Health

AMD is actively managing its capital, having returned $1.3 billion to shareholders through the repurchase of 12.4 million shares in 2025 [5]. The company has $9.4 billion remaining under its share repurchase program [5]. AMD’s balance sheet shows a strong cash position, with $10.55 billion in cash and $3.85 billion in debt, resulting in a net cash position of $6.71 billion [7]. These financial maneuvers aim to bolster investor confidence amidst market uncertainties [GPT].

Sources

amd earnings semiconductor