AMD Crushes Earnings With Record Data Center And PC Client Gains, Shares Slide

AMD CEO Dr. Lisa Su on stage in front of an AMD sign.
Investors are fickle bunch and if you need proof of this, just look at AMD's share price this morning. It's down by more than 10% in early hours trading, despite AMD posting a monster quarter (another one) with a record $7.7 billion in revenue, along with massive gains in the data center—up 69% year-over-year for the fourth quarter, and nearly double (94%) for the full year. What gives?

Despite AMD's data center division raking in $3.9 billion for the quarter and $12.6 billion for the full year, analysts were expecting more. We also suspect that there's some anxiety over the AI movement and how AMD will fare, which ties directly in with the chip designer's data center segment (though not solely in that division).

"We closed 2024 with a strong fourth quarter, delivering record revenue up 24% year-over-year, and accelerated earnings expansion while investing aggressively in AI and innovation to position us for long-term growth and value creation," said AMD EVP, CFO and Treasurer Jean Hu.

AMD also highlighted "strong growth in public cloud deployments" with over 1,000 EPYC instances exiting in 2024, along with growing demand from enterprise customers (including new deployments by Akamai, Hitachi, LG, ServiceNow, Verizon, Visa, and others), and over 450 EPYC platforms being made available by its OEM and ODM partners. To that end, Cisco, Dell, HPE, Lenovo, and Supermicro combined to launch 120 Turin platforms in the fourth quarter.

AMD slide on Q4 2024 results by segment.

Outside of the data center, AMD saw big gains in its client segment, which hit a record $2.3 billion in quarterly revenue. That's a 58% year-over-year jump, which AMD attributed to strong Ryzen demand. And for the full year, the client division generated $7.1 billion in revenue, up 52% from the previous year on strong mobile and desktop Ryzen sales.

AMD's gaming division didn't fare quiet as well. The gaming segment pulled in $563 million in the fourth quarter for a 59% year-over-year decline, and $2.6 billion for the full-year, which is down 59%. This is largely the result of a significant decline in semi-custom revenue. It's also not unexpected, given that the Xbox Series X|S and PlayStation 5, both of which are powered by semi-custom AMD chips, are nearing the end of their lifecycle.

While investors might be a bit sour on overall picture, AMD is markedly more optimistic in its latest earnings release.

"2024 was a transformative year for AMD as we delivered record annual revenue and strong earnings growth," said AMD Chair and CEO Dr. Lisa Su. "Data Center segment annual revenue nearly doubled as EPYC processor adoption accelerated and we delivered more than $5 billion of AMD Instinct accelerator revenue. Looking into 2025, we see clear opportunities for continued growth based on the strength of our product portfolio and growing demand for high-performance and adaptive computing."

Looking ahead, AMD expects to generate $7.1 billion in the first quarter of 2025, plus or minus $300 million.