AMD’s fourth quarter results surge on AI and data-centre demand amid industry shifts

Advanced Micro Devices reported a robust Q4, exceeding market expectations with a 34% revenue increase driven by surging demand for AI and data-centre products, amid increasing industry appetite for specialised chips and evolving supply dynamics.

Advanced Micro Devices delivered results for the fourth quarter that topped earlier market projections, reflecting a surge in demand for its data-centre and AI products. According to the company’s press release, AMD posted Q4 revenue of $10.3 billion, up 34% year‑on‑year, and non‑GAAP diluted earnings per share of $1.53, beating analyst estimates that had centred around $1.32. The full year 2025 revenue totalled $34.6 billion, also a 34% increase from 2024. (Sources: AMD press release, Investing.com).

AMD said the quarter was driven by accelerated adoption of its EPYC server processors and Instinct accelerators, with the data‑centre franchise expanding rapidly as customers scale AI workloads. The company reported record data‑centre revenue in Q4 and highlighted momentum across both its EPYC and Ryzen platforms. CEO Dr. Lisa Su characterised the period as one of strong traction in high‑performance and AI markets.

Wall Street had entered the results with elevated expectations following a period of heightened AI spending by cloud and enterprise customers. Prior estimates cited in market commentary expected roughly $9.67 billion in revenue and adjusted EPS near $1.32 for the quarter; the actual figures therefore represented an upside to those projections. Analysts have pointed to the same secular shift toward AI compute that underpinned AMD’s stronger‑than‑forecast performance.

Market strategists continue to adjust valuations on the back of AI adoption. HSBC analyst Frank Lee raised his price target for AMD, arguing that emerging “agentic AI” workloads will lift server CPU demand and that the market has not fully reflected upside for server processors. “We expect AMD to be a key beneficiary as the upside potential from server CPUs is not fully priced in,” Lee wrote in his research note, according to market reports.

Competitive dynamics and supply constraints remain relevant caveats. The industry has been coping with a global memory shortage that has pressured PC supply chains and could affect AMD’s client segment, while cloud providers and hyperscalers are also investing in custom silicon. At CES 2026 AMD unveiled new hardware, including a Helios rack‑scale server aimed at competing with rival multi‑GPU systems and the MI500 series of accelerators that the company claims offers substantial generational AI performance gains. AMD estimates the AI data‑centre opportunity will scale dramatically toward 2030, but faces rivalry from companies building bespoke chips as well as incumbent accelerator vendors.

News that OpenAI has been exploring alternatives to a dominant accelerator supplier stirred the market and briefly lifted AMD shares in after‑hours trade, reinforcing the idea that customers are diversifying procurement for AI infrastructure. While that signals potential upside for additional suppliers, AMD will have to sustain performance and supply to convert interest into long‑term share gains.

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Source: Fuse Wire Services