Home » AMD Reports $7.66B Q4 Revenue Surge (+24%), But Stock Takes a Hit Here’s Why

AMD Reports $7.66B Q4 Revenue Surge (+24%), But Stock Takes a Hit Here’s Why

Advanced Micro Devices (AMD) reported a 24% year-over-year increase in fourth-quarter revenue, reaching $7.66 billion. Despite this growth, the company’s stock price fell by approximately 4.89% in after-hours trading to $113.66.

Decline in Net Income

Net income for the quarter was $482 million, a 28% decrease from $667 million in the same period the previous year.

Data Center Segment Growth

The data center segment experienced a 69% increase in revenue, totaling $3.9 billion. This growth was driven by record sales of Epyc CPUs and Instinct GPUs, fueled by the rapid adoption of AI technologies. For the full year 2024, data center revenue reached a record $12.6 billion, marking a 94% increase compared to the prior year.

Expansion of Epyc Platforms

By the end of 2024, over 450 Epyc platforms were available from leading server OEMs and ODMs, including more than 120 “Turin” platforms that commenced production in the fourth quarter from companies such as Cisco, Dell, HPE, Lenovo, and Supermicro.s in AI Hardware

AMD accelerated its AI hardware roadmap in 2024, delivering new Instinct accelerators annually, expanding the ROCm software suite, and building strong customer relationships with key industry leaders. The company reported over $5 billion in data center AI revenue for the year.

Client Segment Performance

The client segment reported revenue of $2.3 billion for the quarter, a 58% increase from the previous year. AMD anticipated overall Q4 revenue to be around $7.5 billion, plus or minus $300 million. In November, the company announced a 4% reduction in its workforce, affecting about 1,000 employees.

Market Share Gains in Client Segment

AMD achieved market share gains for the fourth consecutive quarter in the client segment. The company’s Ryzen processors dominated bestselling CPU lists at various global retailers during the holiday period, exceeding 70% share at Amazon, Newegg, Mindfactory, and others.

Gaming Segment Decline

The gaming segment saw a 58% decline in revenue, totaling $563 million, primarily due to lower semi-custom revenue from Xbox and PlayStation console sales. Overall, this console generation has been strong, with cumulative unit shipments surpassing 100 million in the fourth quarter. AMD expects semi-custom sales to return to more historical patterns in 2025.

Embedded Segment Revenue

The embedded segment reported revenue of $923 million, a 13% decrease from the previous year, as customers continued to normalize inventory levels.

2025 Outlook

For the first quarter of 2025, AMD expects revenue to be approximately $7.1 billion, plus or minus $300 million, representing a 30% year-over-year growth and a sequential decline of about 7%. The company anticipates a non-GAAP gross margin of approximately 54%.

CEO’s Perspective

AMD CEO Lisa Su described 2024 as a transformative year, with record annual revenue and strong earnings growth. The data center segment’s annual revenue nearly doubled, driven by accelerated Epyc processor adoption and over $5 billion in AMD Instinct accelerator revenue. Looking into 2025, Su sees clear opportunities for continued growth based on the strength of AMD’s product portfolio and growing demand for high-performance and adaptive computing.

Analyst Call Highlights

In an analyst call, Su highlighted that the data center segment contributed roughly 50% of annual revenue, with significant adoption of Instinct and Epyc processors among cloud, enterprise, and supercomputing customers. Q4 results were driven by double-digit growth in both the data center and client segments. On a full-year basis, annual revenue grew 14% to $25.8 billion, as data center revenue nearly doubled and client segment revenue increased by 52%, offsetting declines in the gaming and embedded segments.

Workforce Reduction

As noted, AMD laid off about 1,000 of its 26,000 employees starting in November, representing approximately 4% of its staff. This move comes as AMD continues to compete with Intel in the x86 processor market and faces challenges in the transition from GPUs to AI accelerators, particularly against market leader Nvidia.

Market Share and Design Wins

Mercury Research reports that AMD’s Q4 share of processors against Intel is now 34%, up significantly from previous years. Su stated that AMD closed a record $14 billion in design wins in 2024, up more than 25% year-over-year, as customer adoption of adaptive computing platforms expanded and the company secured large, new embedded processor designs.

2025 Growth Expectations

For 2025, AMD expects the demand environment to strengthen across all its businesses, driving strong growth in the data center and client segments, with modest increases in the gaming and embedded segments. The company anticipates delivering strong double-digit percentage revenue and earnings per share growth year-over-year.

Impact of DeepSeek’s AI Model

Su mentioned DeepSeek, a Chinese-made AI model that operates with minimal use of GPUs, which recently led to a decline in tech stocks, including Nvidia’s. She emphasized the rapid.

Source : https://ir.amd.com/news-events/press-releases/detail/1236/amd-reports-fourth-quarter-and-full-year-2024-financial

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