AMD's Client Segment Revenues Rise: Will It Be the Next Growth Driver?
Advanced Micro Devices AMD is benefiting from robust Client revenue, which soared 67.7% year over year to $2.294 billion, accounting for 30.8% of total revenues in the first quarter of 2025.
AMD's latest Ryzen CPUs, particularly those based on the Zen 5 architecture, have seen strong demand, especially for gaming and high-performance desktops and laptops. The launch of new products like the Ryzen 9 9950 X3D helped set sellout records and boosted the client segment.
The sales of higher-end products, including Ryzen processors for both desktop and mobile, led to higher average selling prices and contributed positively to revenues. The company also saw robust demand for its AI-enabled processors, including the Ryzen AI Max Plus and Ryzen AI 7 and 5 300 series, which set new standards for computing, graphics performance, and battery life.
In 2025, AMD announced that its Ryzen AI PRO processors will power new Dell Pro devices, marking a significant milestone in the ongoing strategic collaboration between AMD and Dell. AMD also introduced its new Ryzen AI Max, AI 300, and 200 Series processors ahead of CES 2025, transforming AI PC capabilities with advanced performance for mobile users, professionals, and enterprises.
AMD's commercial PC adoption has also been a major growth driver. Ryzen Pro PC sell-through increased more than 30% year over year, supported by an 80% increase in the number of AMD-powered commercial systems from major OEMs like HP, Lenovo, Dell, and Asus.
Advanced Micro Devices Faces Stiff Competition
AMD faces stiff competition in the client segment from the likes of Intel Corporation INTC.
Intel is AMD's primary competitor in the supply of CPUs and APUs. Intel's dominance in the microprocessor market and its aggressive business practices pose challenges for AMD. With Intel systems so well entrenched, there is an obvious preference for system integrators to choose Intel processors over AMD.
Beyond Intel, a variety of companies provide or have developed ARM-based microprocessors and platforms such as Qualcomm QCOM. ARM-based designs are being used in the PC market, which could lead to further growth and development of the ARM ecosystem.
Qualcomm's Arm-based processors, primarily known as Snapdragon, are gaining traction in the PC market, further strengthening the ARM ecosystem and intensifying competition for AMD.
In March 2025, Qualcomm announced that it had extended its Snapdragon G Series portfolio with the addition of next-generation gaming chipsets, Snapdragon G3 Gen 3, Snapdragon G2 Gen 2 and Snapdragon G1 Gen 2 chips. The 2025 product lineup supports a wide array of play types and gamers, giving manufacturers a solid platform for innovation.
AMD's Share Price Performance, Valuation and Estimates
Advanced Micro Device shares have gained 5% year to date (YTD), outperforming the broader Zacks Computer & Technology sector's return of 1.5%.
AMD Stock's Performance
AMD stock is trading at a premium, with a forward 12-month Price/Sales of 6.01X compared with the industry's 3.69X. AMD has a Value Score of D.
Price/Sales (F12M)
The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 54 cents per share, which has declined 16.9% over the past 30 days, indicating a 21.74% decline year over year.
The consensus mark for 2025 earnings is pegged at $3.92 per share, which declined 4.1% over the past 30 days, suggesting 18.43% year-over-year growth.
AMD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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