Usually diversity is a sign of a healthy and resilient business. But for the folks on Wall Street, the breadth of AMD’s portfolio is a bug, not a feature – one that sent the House of Zen’s share price down by more than eight percent in after hours trading on Tuesday.
AMD’s scrip slipped despite the company delivering solid Q4 results, with net income surging 213 percent to $1.5 billion on revenues that grew 34 percent year-over-year to reach $10.27 billion. Datacenter and client products both delivered revenue growth, at 39 and 37 percent to $5.4 billion and $3.9 billion respectively. By comparison, the company’s embedded gains were far more modest, with FPGA sales up about three percent for the quarter.
The company forecast revenue will dip to $9.8 billion for Q1 of FY 2026. That figure will represent 32 percent growth, and reflect seasonal weakness in its PC, gaming, and embedded divisions that will offset growing datacenter and AI revenue.
The result is a bit of a catch-22 for AMD. On one hand, the seasonal decline means its datacenter division is doing most of the heavy lifting at a time when fears of an AI bubble are at an all-time high. On the other, AMD’s Q1 growth trajectory could have been even stronger if the rest of the company weren’t weighing it down.
Yet a seasonal dip is nothing nasty for AMD, because PC sales tend to dry up following the holiday season. Meanwhile, demand for AMD’s semi-custom chips used in Microsoft’s Xbox and Sony’s PlayStation have all but dried up because it’s been years since the gaming giants released new consoles.
One phenomenon that could complicate things for AMD headed into the 2026 fiscal year is the ongoing memory shortage. Over the past few months memory prices have more than tripled, with analysts this week warning prices could double again in the first quarter.
Despite this, CEO Lisa Su remains confident AMD can grow its PC business in 2025 by prioritizing the enterprise and high-end PC segments. “Our focus areas are enterprise. That’s a place where we’re making very nice progress in 2025 and we expect that into 2026,” she said.
High-end systems tend to sell in smaller volumes but at higher margins than mainstream PC platforms.
Su is less concerned about a shortage of memory impacting the company’s growing GPU business. “Given the lead times for things like HBM and wafers… we’re working closely with our suppliers over a multi-year timeframe in terms of what we see in demand,” she told analysts.
Much like Nvidia’s Blackwell and Rubin GPUs, AMD’s Instinct accelerators make use of high-bandwidth memory (HBM) which has to be co-packaged alongside the compute logic.
“Independent of the current market conditions, we’ve been planning for a significant ramp in both our CPU as well as our GPU business over the past, you know, couple of years,” Su added. ®