Advanced Micro Devices (AMD) is preparing to release its first-quarter 2025 earnings after the closing bell on Tuesday. As one of the most closely watched semiconductor companies, AMD’s upcoming report comes at a critical juncture for the chip industry, which is navigating a mix of booming AI demand and tightening regulatory scrutiny, especially concerning exports to China.
Geopolitical Pressures Weigh on Outlook
One of the biggest developments weighing on AMD’s stock in recent weeks has been a shift in U.S. trade policy. The Biden administration has followed through on stricter restrictions first proposed during the Trump era, placing new licensing requirements on the export of high-end chips to China.
The new restrictions have especially impacted chips used in artificial intelligence applications, including AMD’s MI300 series. As a result, AMD warned last month that it could incur up to $800 million in charges if it fails to obtain a necessary license to ship these components.
While AMD isn’t alone in facing regulatory challenges—Nvidia recently noted it could face as much as $5.5 billion in similar charges—investors have grown cautious. These uncertainties have pushed several analysts to revise their price targets ahead of AMD’s earnings report.
Revised Price Targets Reflect Caution
Bank of America Securities recently lowered its AMD price target from $110 to $105, characterizing the licensing rules as an “effective shipment ban.” The move suggests the firm anticipates prolonged disruption to AMD’s access to the Chinese market, which is critical for future growth in AI and data center chip sales.
Deutsche Bank echoed this cautious stance, reducing its target from $120 to $105. Meanwhile, Wedbush Securities made one of the most dramatic revisions, cutting its target from $150 to $115, suggesting a more conservative long-term outlook.
Despite these downgrades, the average price target across analysts tracked by Visible Alpha remains relatively bullish at $123.50—a roughly 25% premium to AMD’s closing price of $98.80 on Friday. Among 12 analysts, six currently rate the stock a “Buy,” five a “Hold,” and one a “Sell.”
Recent Stock Performance and Market Context
AMD shares have fallen nearly 20% so far in 2025, a stark contrast to the booming narrative around artificial intelligence that dominated market sentiment throughout 2023 and early 2024. Much of that decline is attributable to macroeconomic headwinds and sector-specific risks, especially in relation to China’s role in the global semiconductor supply chain.
Still, several factors suggest the long-term thesis for AMD may remain intact—particularly as companies double down on AI-related infrastructure investments.
AI Investment Could Offset Regulatory Risks
In a note released last Thursday, analysts at Citi suggested that AI capital expenditures (CapEx) remain a key driver of growth for chipmakers like AMD. “It appears that spending for AI continues to be unabated,” the team wrote.
Their comments follow recent updates from major tech companies. Meta Platforms, for instance, announced plans to increase its CapEx this year to between $64 billion and $72 billion, largely to support AI infrastructure development. Microsoft and Alphabet are also aggressively investing in AI, with each projecting AI-related CapEx of $80 billion and $75 billion, respectively.
“AI infrastructure buildouts remain key priorities for hyperscalers,” Citi wrote. “We view this as positive for AI-exposed stocks, including AMD.”
While export restrictions may limit some overseas revenue, analysts argue that domestic and allied-market demand for AI chips could more than compensate. AMD’s upcoming results will be the first real test of that hypothesis.
Financial Expectations: Revenue, Earnings, and Key Segments
Wall Street is expecting AMD to post revenue of $7.13 billion for the first quarter, a year-over-year increase of 30%. That strong topline growth is expected to be matched by even more impressive gains on the bottom line: adjusted net income is forecast to reach $1.55 billion, or 94 cents per share, up more than 50% from the same quarter last year.
The biggest growth driver is expected to be the data center segment, where AMD has made aggressive moves to compete with Nvidia and Intel. Analysts forecast data center revenue to climb 55% year-over-year to $3.63 billion, reflecting strong demand for server processors and AI accelerators.
The client segment, which includes desktop and laptop CPUs, may show more modest growth or even flat results, as consumer demand continues to stabilize following pandemic-era highs. Gaming and embedded segments are also expected to contribute, albeit less dramatically.
Competitive Landscape: AMD vs. Nvidia
AMD continues to face stiff competition from Nvidia, which currently leads the AI chip market by a wide margin. Nvidia’s H100 and upcoming H200 chips remain the top choices for AI workloads, but AMD’s MI300 series is beginning to gain traction among hyperscalers and enterprise customers.
Some analysts believe AMD is in a good position to win AI market share over the next two years, especially as customers seek alternatives to Nvidia’s increasingly expensive offerings. However, Nvidia’s early dominance gives it significant pricing power and influence over the software ecosystem—advantages AMD will need time and resources to overcome.
AMD’s competitive strategy has focused on price-to-performance optimization, as well as strategic partnerships with cloud providers. CEO Lisa Su has emphasized AMD’s commitment to innovation, aiming to expand its AI hardware portfolio while maintaining strong margins.
What to Watch in the Earnings Call
Investors will be closely watching AMD’s earnings call for guidance on the following:
- Licensing and Export Risks – Updates on efforts to secure licenses for Chinese exports will be critical, especially if management outlines any timeline or backup plans.
- AI Chip Demand – Commentary on orders and deployments of the MI300 and future AI chips will be a key indicator of AMD’s growth trajectory.
- Data Center and Cloud Trends – Insight into customer spending patterns and competitive positioning in data centers could influence future forecasts.
- Gross Margin Trends – AMD’s ability to maintain or grow margins amid pricing pressure and regulatory hurdles will be closely scrutinized.
Looking Ahead
While near-term challenges remain—particularly in light of export restrictions and global tensions—AMD’s long-term prospects are still rooted in two of the most promising tech megatrends: AI and data centers.
The company’s ability to execute in these areas, while navigating a more complex geopolitical environment, will ultimately determine whether the recent analyst downgrades prove overly cautious—or a sign of deeper issues ahead.
Frequently Asked Questions
When will AMD report its first-quarter 2025 earnings?
AMD is scheduled to release its Q1 2025 earnings results after the market closes on Tuesday, May 6, 2025.
What are analysts expecting from AMD’s earnings report?
Expectations include:
- Revenue: $7.13 billion (up 30% year-over-year)
- Adjusted Net Income: $1.55 billion
- Earnings Per Share (EPS): 94 cents
- Data Center Revenue: Projected to rise 55% to $3.63 billion
Why have analysts recently lowered their AMD price targets?
Several analysts reduced their price targets due to new U.S. export controls that could limit AMD’s sales of high-performance chips to China. These restrictions may result in revenue losses and potential charges if export licenses are not secured.
What are some notable price target changes?
- Bank of America: lowered from $110 to $105
- Deutsche Bank: lowered from $120 to $105
- Wedbush: lowered from $150 to $115
The average consensus price target is about $123.50, which remains above the current trading level.
How has AMD stock performed so far in 2025?
AMD stock has declined approximately 20% year-to-date, affected by regulatory uncertainty and broader market caution toward semiconductor equities.=
Is artificial intelligence (AI) still a growth driver for AMD?
Yes. Despite policy risks, AI remains a major growth catalyst. Leading tech firms are continuing to ramp up spending on AI infrastructure, which benefits chipmakers like AMD that supply key components for those systems.
Conclusion
Advanced Micro Devices (AMD) is heading into its first-quarter 2025 earnings report at a crossroads. While the company faces near-term headwinds from tightened U.S. export regulations—impacting its ability to ship advanced chips to China—it remains a central player in the booming AI and data center markets.
