‘Despite the uncertain macroeconomic backdrop, our first-quarter performance highlights the strength of our differentiated product portfolio and execution and positions us well for strong growth in 2025,’ AMD CEO Lisa Su says in the company’s first-quarter earnings call.
AMD CEO Lisa Su said the company is “expanding investments” in its product and technology road maps and go-to-market initiatives, among other things, to seize on the next wave of growth opportunities it sees despite economic uncertainty.
Su made the comment during AMD’s first-quarter earnings call on Tuesday after the firm reported a record $7.4 billion in revenue, down 3 percent from the previous quarter but up 36 percent year over year, made possible by significant growth of its Instinct GPUs and EPYC CPUs for data centers and Ryzen CPUs for PCs.
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The strong performance also contributed to AMD’s gross margin growing by 2 points year over year to 54 percent, unchanged from the previous quarter, and its operating income growing 57 percent year over year to $1.7 billion, down 12 percent sequentially.
AMD’s revenue surpassed Wall Street’s expectations by $320 million while its earnings of 96 cents per share was 3 cents above analyst estimates.
“Despite the uncertain macroeconomic backdrop, our first-quarter performance highlights the strength of our differentiated product portfolio and execution and positions us well for strong growth in 2025,” she said.
Su said the company is also expanding investments in its full-stack AI software and data-center scale solutions capabilities, the latter of which received a boost by the completion of AMD’s $4.9 billion acquisition of ZT Systems in March.
“We are also doubling down on our execution to deliver—and where possible accelerate—our industry-leading road maps,” she said.
The increased spending across several key areas was reflected in AMD’s first-quarter operating expenses, which grew 28 percent year-over-year and 2 percent sequentially to $2.2 billion. This is expected to grow another 4.5 percent sequentially to roughly $2.3 billion in the second quarter, according to the company’s financial outlook.
“We view the current environment as a strategic opportunity to further differentiate AMD as we deliver an expanding product portfolio that combines leadership compute and AI capabilities for data centers, edge, PCs, and embedded end devices,” Su said.
AMD expects to make $7.4 billion in the second quarter, plus or minus $300 million, which would be roughly in line with what it made in the first quarter and a 27.5 percent increase from last year’s second quarter.
Jean Hu, AMD’s CFO, said the company’s second-quarter guidance factors in an estimated $800 million hit from the Trump administration’s new export restrictions against the Instinct MI309 GPU it had tailored for China based on previous U.S. export rules.
In AMD’s data center segment, revenue grew 57 percent year over year to $3.7 billion, driven by “strong” demand from hyperscale and enterprise customers on the CPU side.
The company saw high demand for its EPYC CPUs from enterprises, both in the cloud, where the number of EPYC-powered instances activated by Forbes 2000 companies more than doubled year-over-year, and on-premises, where CPU sales “grew by a large double digit percent year over year for the seventh straight quarter,” according to Su.
“We have built significant enterprise momentum over the last few years as our partners expanded the number of EPYC-based platforms to more than 450 and we scaled our joint go-to-market programs,” she said.
“As a result, EPYC is now deployed by all of the top 10 telecom, aerospace and semiconductor companies, nine of the top 10 automotive, seven of the top 10 manufacturing, and six of the top 10 energy companies on the Forbes 2000,” Su added.
As for AMD’s Instinct GPUs for AI data centers, revenue increased by a “significant double-digit percent year over year,” which was driven by shipments of its Instinct MI325X GPUs for new enterprise and cloud deployments,” according to the CEO.
“Several hyperscalers expanded their use of Instinct accelerators to cover an increasing range of generative AI, search, ranking and recommendation use cases,” she said.
“We also added multiple tier-one cloud and enterprise customers in the quarter, including one of the largest frontier model developers that is now using Instinct GPUs to serve a significant portion of their daily inference traffic,” Su added.
To further encourage adoption of AMD’s Instinct GPUs, Su said the company has “significantly accelerated” the release cadence for updates to its ROCm AI software stack from a quarterly basis to bi-weekly. These updates now include “ready-to-deploy training and inferencing containers” that “include performance optimizations and support for the latest libraries, kernels and algorithms,” she added.
AMD started to sample its next-generation MI350 GPUs with multiple customers in the first quarter and is on track to begin production by the middle of this year, according to Su.
“Customer interest in the MI350 series is very strong, setting the stage for broad deployment in the second half of this year,” she said.
As for the next-generation MI400 GPU AMD plans to launch next year, Su said the ZT Systems team is “fully engaged and already co-designing with key customers on rack-level designs optimized” for the architecture. The team is also “working with customers and OEM partners to accelerate time-to-market” for the MI350, she added.
In AMD’s client and gaming segment, revenue grew 28 percent year over year to $2.9 billion. Client revenue alone grew 68 percent year over year, marking a “fifth consecutive quarter of revenue share gains” for AMD, according to Su.
The company also saw record CPU average selling prices “driven by a richer mix of high-end desktop and mobile Ryzen processors,” she said.
Su said demand for AMD-based commercial PCs was “very strong” in the first quarter, with sell-through of Ryzen Pro processors growing more than 30 percent year over year. This was “driven by end customer wins and an 80 percent increase from 2024 in the number of AMD-powered commercial systems from HP, Lenovo, Dell and Asus,” she added.
“We closed multiple wins with large auto, energy, healthcare, financial services and telecom companies in the quarter,” Su said.
Despite any economic headwinds, AMD remains “confident” that the company can “grow client processor revenue well ahead of the market in 2025,” according to Su. This is thanks to “expanding adoption of our desktop channel and consumer and commercial notebook portfolio as well as a richer mix,” she said.
AMD’s embedded segment revenue declined 3 percent year over year to $823 million, with Su noting that demand has continued to “recover gradually.”
“We expect improving demand in the test and measurement, communications and aerospace markets will drive a return to growth in the second half of 2025,” she said.
