AMD Shares Rebound as AI Growth Boosts Confidence After Earnings
Advanced Micro Devices (AMD) shares recovered earlier losses on Wednesday after strong sales and profit growth in its AI chip business helped offset broader concerns about high tech valuations.
By 12:41 p.m. ET, AMD stock was up 2.4%, after falling as much as 3% earlier in the trading session. The rebound highlights investor confidence in the company’s growing position in the artificial intelligence hardware market.
AMD Strengthens Rivalry with Nvidia
AMD shares have more than doubled in 2025, as the company positions itself as a key challenger to Nvidia in the race to supply the computing power driving next-generation AI systems. CEO Lisa Su told investors that the AI boom is creating “unprecedented growth opportunities.”
AMD has also benefited from strategic partnerships with major players, including OpenAI and the U.S. Department of Energy. These collaborations underscore AMD’s role at the heart of the AI ecosystem, though some investors worry that aggressive dealmaking and heavy spending by big tech firms could be fueling a market bubble.
Data Center and Gaming Drive Revenue
In the September quarter, data center revenue — which includes AI chip sales — rose 22% to $4.3 billion. Meanwhile, client and gaming revenue surged 73% year over year to $4 billion.
Overall, total revenue reached $9.25 billion, exceeding analyst expectations, according to LSEG data cited by Reuters. Net income climbed to $1.96 billion, or $1.20 per share, also beating forecasts.
For the current quarter, AMD expects revenue of about $9.6 billion, plus or minus $300 million — a forecast that also topped Wall Street estimates. The company described this as a “clear step up” in its growth path, citing expanding data center AI operations and a broader compute portfolio as key revenue drivers.
Profit Margins Under Pressure
Despite the upbeat outlook, investors remain focused on profitability. AMD’s data center division saw a 14% decline in margins, as the company ramps up chip production to meet soaring AI demand — a move that has temporarily increased costs.
Analysts at Jefferies, including Blayne Curtis and Kevin Garrigan, noted that operating expenses were slightly higher than expected but said the spending was mainly tied to research and development, which is “to be expected” given AMD’s rapid growth phase.
They added that further insights into AMD’s AI roadmap are expected at the company’s upcoming analyst day next week.
