Advanced Micro Devices (AMD) reported a Non-GAAP gross margin of 53.7% for Q1 2025, up 140 basis points year-over-year, achieving margin expansion for the fifth consecutive quarter. This growth is attributed to increased sales of high-end Ryzen processors and data center products. AMD projects a gross margin of approximately 54% for Q2 2025, excluding an $800 million inventory charge tied to MI308 export controls.
Despite competition from NVIDIA and Intel, both of which are facing margin declines, AMD is experiencing robust demand for high-end Ryzen CPUs. NVIDIA’s gross margins declined by 12.5 percentage points to 61% due to a $4.5 billion charge linked to export restrictions, while Intel’s gross margin fell from 45.1% to 39.2% due to restructuring costs.
AMD shares have risen 19% year-to-date, compared to a 6.1% increase in the broader Zacks Computer & Technology sector. The Zacks Consensus Estimate for AMD’s earnings in Q2 2025 stands at 54 cents per share, reflecting an 8.4% decrease over the past month and a year-over-year decline of 21.74%.
