ADVANCED MICRO DEVICES INC AMD

AMD's AI business is accelerating, with the MI400 series and Helios platform marking a major inflection point. The MI350 series ramped well in Q4 FY25, contributing to record Instinct GPU revenue. Customer engagements for the next-gen MI400 series and Helios platform are expanding, including a multi-generation partnership with OpenAI and active discussions with other customers for multi-year deployments starting with Helios and MI450 later in 2026. The MI400 series will address a full range of cloud, HPC, and enterprise AI workloads, with MI455X and Helios for AI superclusters, MI430X for HPC and sovereign AI, and MI440X for enterprise. Development of the MI500 series, based on CDNA 6 architecture and 2nm process with HBM4E memory, is on track for a 2027 launch, expected to deliver a significant leap in AI performance.

The Data Center segment saw record EPYC processor sales, with fifth-gen EPYC CPUs accounting for over half of server revenue. Hyperscaler demand was very strong, with over 230 new AMD instances launched by AWS, Google, and others in Q4, bringing the total to nearly 1,600. Enterprise adoption of EPYC more than doubled in 2025, driven by leadership performance and expanded solutions. Management expects the overall server CPU TAM to grow strong double digits in 2026, driven by AI ramp, and AMD is increasing supply capacity to meet this demand. The next-generation Venice CPU is expected to extend leadership and will launch later in 2026.

The Client business achieved record revenue of $3.1 billion, up 34% year-over-year, driven by strong demand for Ryzen desktop and mobile CPUs. Desktop CPU sales set a record for the fourth consecutive quarter, and commercial PC sell-through grew over 40% year-over-year. In gaming, revenue increased 50% year-over-year to $843 million, with higher channel sell-out for Radeon RX 9000 series GPUs. However, semi-custom sales declined sequentially, and are expected to see a significant double-digit decline in 2026 as the console cycle matures, with Microsoft's next-gen Xbox featuring an AMD SoC expected in 2027.

The Embedded segment revenue increased 3% year-over-year to $950 million, led by strength in test and measurement and aerospace, and growing adoption of Embedded x86 CPUs. The segment achieved a record $17 billion in design wins in 2025, bringing the total to over $50 billion since the Xilinx acquisition. New products like Versal AI Edge Gen 2 SoCs, Spartan UltraScale+ devices, and new EPYC/Ryzen embedded CPUs were launched to strengthen the portfolio for various applications including network security, industrial edge, in-vehicle infotainment, and autonomous platforms.

AMD is aggressively investing in R&D and go-to-market activities to support its AI roadmap and long-term growth. While OpEx increased in 2025, the company expects to achieve operating leverage in 2026, with revenue growing faster than operating expenses. The company also repurchased 12.4 million shares for $1.3 billion in FY25, with $9.4 billion remaining authorization. The sale of the ZT Systems manufacturing business to Sanmina was completed in Q4, with its financial results reported separately as discontinued operations.