AMD Semiconductors
Advanced Micro Devices, Inc.
AMD designs CPUs, GPUs, AI accelerators, FPGAs, and networking chips for data centers, PCs, game consoles, and embedded systems, and has them made by outside foundries — mainly TSMC. FY2025 revenue rose 34% to $34.6 billion, led by Data Center ($16.6 billion) as hyperscalers deployed its Instinct AI GPUs. In October 2025 OpenAI agreed to deploy 6 gigawatts of AMD GPUs, and in February 2026 Meta made a similar commitment; in both deals AMD issued warrants for up to 160 million shares that vest as purchases and stock-price targets are reached.
Last updated
Analysis last edited: October 4, 2026 · Financial data fetched: October 4, 2026 14:41 (SEC EDGAR) · Source 10-K filed: February 4, 2026
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
01
Company profile
- Legal name
- ADVANCED MICRO DEVICES INC
- Headquarters
- SANTA CLARA, CA
- Incorporated in
- Delaware
- Fiscal year end
- 12/26
- Exchange & ticker
- NASDAQ: AMD
- Industry
- Semiconductors
- CIK
- 2488
- Website
- https://www.amd.com/ ↗
- IR page
- https://ir.amd.com/ ↗
Workforce (as of FY2025 year-end)
Employees
31,000
Source: Form 10-K (FY2025) cover page and business description
02
Earnings calendar
When the company reports each quarter: the quarter-end date, the day results were released, and when the 10-Q or 10-K was filed.
Next report
Q3 FY2026
Quarter end: September 2026. In past years, Q3 results were released 31–38 days after quarter end (Nov 4, 2025; Oct 29, 2024; Oct 31, 2023). No date has been announced in the sources this site uses.
Reporting pattern
- Fiscal year ends around December 26.
- Reports four times a year: three quarterly reports (10-Q) and an annual report (10-K) for Q4.
- Earnings releases came 31–38 days after quarter end over the last 12 quarters.
| Quarter | Quarter ended | Earnings release (8-K) | Report filed (10-Q / 10-K) |
|---|---|---|---|
| Q2 FY2026 | Jun 27, 2026 | Aug 4, 2026 (+38 days) | Aug 5, 2026 10-Q (+39 days) |
| Q1 FY2026 | Mar 28, 2026 | May 5, 2026 (+38 days) | May 6, 2026 10-Q (+39 days) |
| Q4 FY2025 | Dec 27, 2025 | Feb 3, 2026 (+38 days) | Feb 4, 2026 10-K (+39 days) |
| Q3 FY2025 | Sep 27, 2025 | Nov 4, 2025 (+38 days) | Nov 5, 2025 10-Q (+39 days) |
| Q2 FY2025 | Jun 28, 2025 | Aug 5, 2025 (+38 days) | Aug 6, 2025 10-Q (+39 days) |
| Q1 FY2025 | Mar 29, 2025 | May 6, 2025 (+38 days) | May 7, 2025 10-Q (+39 days) |
| Q4 FY2024 | Dec 28, 2024 | Feb 4, 2025 (+38 days) | Feb 5, 2025 10-K (+39 days) |
| Q3 FY2024 | Sep 28, 2024 | Oct 29, 2024 (+31 days) | Oct 30, 2024 10-Q (+32 days) |
| Q2 FY2024 | Jun 29, 2024 | Jul 30, 2024 (+31 days) | Jul 31, 2024 10-Q (+32 days) |
| Q1 FY2024 | Mar 30, 2024 | Apr 30, 2024 (+31 days) | May 1, 2024 10-Q (+32 days) |
| Q4 FY2023 | Dec 30, 2023 | Jan 30, 2024 (+31 days) | Jan 31, 2024 10-K (+32 days) |
| Q3 FY2023 | Sep 30, 2023 | Oct 31, 2023 (+31 days) | Nov 1, 2023 10-Q (+32 days) |
Source: SEC EDGAR filing history. Release dates are the dates the earnings release was furnished to the SEC on Form 8-K (Item 2.02), which is normally the day results are announced. Fiscal years are labeled by the calendar year in which they end.
03
Flagship products & services
Data Center
AMD Instinct GPUs
Examples: MI350X, MI450 series
AI accelerators for training and inference.
Data Center
EPYC server CPUs
Examples: 5th Gen EPYC
Server processors.
Client and Gaming
Ryzen and Radeon
Examples: Ryzen CPUs, Radeon GPUs, console SoCs
PC processors, graphics, and semi-custom console chips.
Embedded
FPGAs and adaptive SoCs
Examples: FPGAs, adaptive SoCs, embedded CPUs and APUs
Programmable and embedded chips.
Descriptions are from the FY2025 Form 10-K's Item 1.
04
Recent strategic focus
FY2025 developments from the 10-K, and 2026 events from 8-Ks.
Hyperscaler GPU deals
OpenAI (October 2025) and Meta (February 2026) each committed to an initial gigawatt of Instinct GPUs, with warrants for up to 160 million shares each.
Source: 8-Ks filed 2025-10-06 and 2026-02-24
World Labs acquisition
On September 26, 2026, AMD agreed to buy World Labs for about $8.2B in AMD stock.
Source: 8-K filed 2026-09-28
Debt raised
In August 2026 AMD sold $4.75B of senior notes due 2029–2036.
Source: 8-K filed 2026-08-17
Capex ÷ D&A (FY2025)
1.87x
Well above depreciation — expansion-stage investment
formulacapital expenditures ÷ depreciation & amortization
e.g.$974M ÷ $521M = 1.87x
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
R&D-to-revenue ratio (FY2025)
23.4%
formularesearch & development expense ÷ revenue × 100
e.g.$8,091M ÷ $34,639M × 100 = 23.4%
Where the money goes, over time
Unit: $M. Capex went from $301M in FY2021 to $974M in FY2025
- Capex
- R&D
formulacapital expenditures ÷ depreciation & amortization
termsCapital expenditures (capex) · Depreciation & amortization (D&A)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
05
Key figures at a glance
FY2021–FY2025, 5 years.
Revenue (FY2025)
$34.64B
As reported in the 10-K
Revenue CAGR (4 years)
+20.5%▲favorable
formula(last-period revenue ÷ first-period revenue) ^ (1 ÷ years) − 1
e.g.($34,639M ÷ $16,434M) ^ (1÷4) − 1 = 20.5%
termsCAGR · ^ (exponent) · Revenue (net sales)
Operating margin (FY2025)
10.7%▼caution
-11.5pt vs. 4 years ago
formulaoperating income ÷ revenue × 100
e.g.$3,694M ÷ $34,639M × 100 = 10.7%
ROE (FY2025)
7.2%
5-year average: 11.6%
As reported in the 10-K
P/B (FY2025 end)
5.56x
formulaP/E × EPS ÷ BVPS (= period-end share price ÷ book value per share)
e.g.81.1x × $2.65 ÷ $38.65 = 5.56x
Period-end (fiscal year-end) value, not today's P/B
EV/EBITDA (FY2025 end)
82.9x
formula(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization)
e.g.($351,699M + $3,222M − $5,539M) ÷ ($3,694M + $521M) = 82.9x
termsEV/EBITDA · Market capitalization · Interest-bearing debt · EBITDA · Depreciation & amortization (D&A)
Period-end (fiscal year-end) value, not today's multiple
- ▲
Revenue grew +20.5% a year over 4 years (strong growth)
From $16.43B in FY2021 to $34.64B in FY2025. The annualized rate (CAGR) makes it possible to compare growth pace across companies of different sizes.
- ▼
Operating margin declined: 22.2% → 10.7%
How much operating profit is left per $100 of revenue. It moved -11.5 points over 4 years — pricing power, cost control, and product mix all show up here.
- ▲
Equity ratio is 81.9% (a high level of financial stability)
The share of total assets funded by equity rather than debt. 50%+ is often read as low bankruptcy risk, though the right level varies by industry (real estate and leasing run lower, for instance).
- ▲
Free cash flow was positive in 5 of 5 years
Operating cash flow minus capital expenditures: the cash left over after funding the business’s own investment, available for dividends, buybacks, acquisitions, or debt paydown. A negative year can mean heavy investment, or weak core earnings — worth distinguishing.
- ▲
ROE averaged 11.6% over 5 years (latest: 7.2%)
How much profit was generated on shareholders’ equity. Roughly 10%+ is often cited as solid for a U.S. company, though this varies a lot by industry and capital intensity.
06
Business model
Data Center
AI accelerators (Instinct GPUs), EPYC server CPUs, DPUs, AI network cards, and FPGAs for cloud and enterprise data centers, plus the 'Helios' rack-scale platform combining them.
01 what it draws on
Inputs & resources
- Chip designs and the ROCm software stack
- TSMC wafers and advanced packaging
- ZT Systems' rack design team
02 what it does
Activities
- Designing chips and systems
- Working with hyperscalers on deployments
03 who it serves
Customers
- Hyperscale cloud providers, OEMs, ODMs, and AI companies such as OpenAI and Meta
04 how money comes in
How it earns
- Chip and system sales
Data Center: how it makes money
- Revenue $16.6B (+32%) and operating income $3.6B in FY2025.
- An inventory charge of about $800M on MI308 GPUs after new U.S. export restrictions on China, of which about $360M was reversed after licenses were granted.
Client and Gaming
Ryzen CPUs and APUs for PCs, Radeon discrete GPUs, and semi-custom chips for game consoles, where AMD is the market share leader.
01 what it draws on
Inputs & resources
- CPU and GPU designs
02 what it does
Activities
- Selling chips to PC makers and console makers
03 who it serves
Customers
- PC OEMs, retailers, and console makers
04 how money comes in
How it earns
- Chip sales and semi-custom development services
Client and Gaming: how it makes money
- Revenue $14.6B (Client $10.6B, Gaming $3.9B) and operating income $2.9B in FY2025, up from $1.2B.
Embedded
Embedded CPUs, APUs, FPGAs, system-on-modules, and adaptive SoCs for industrial, automotive, communications, and other embedded uses.
01 what it draws on
Inputs & resources
- FPGA and adaptive SoC designs
02 what it does
Activities
- Selling programmable and embedded chips
03 who it serves
Customers
- Industrial, automotive, communications, and defense makers
04 how money comes in
How it earns
- Chip sales
Embedded: how it makes money
- Revenue $3.5B (−3%) and operating income $1.2B in FY2025, down from $5.3B of revenue in FY2023.
Revenue by segment (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue, margin = segment profit ÷ segment revenue × 100
Data Center
16,635 (48%)profit 3,603 · margin 21.7%
Client and Gaming
14,550 (42%)profit 2,855 · margin 19.6%
Embedded
3,454 (10%)profit 1,243 · margin 36.0%
Source: Form 10-K (FY2025) — Note on segment reporting Profit is segment operating income. An 'All other' category with a $4.0B operating loss isn't allocated to segments; consolidated operating income was $3.7B.
07
Where it earns
Many U.S.-listed companies earn most of their revenue outside the U.S. — this breaks down revenue by country/region so it's clear where the business actually makes its money.
Largest market (FY2025)
United States — 33% of revenue
Revenue by country / region (FY2025)
Unit: $M — bar length = revenue, (%) = share of total company revenue
United States
11,363 (33%)China (incl. Hong Kong)
7,751 (22%)Taiwan
5,186 (15%)Singapore
4,284 (12%)Other regions
6,055 (17%)
Source: Form 10-K (FY2025) — Note on segment reporting, geographic revenue Sales to external customers by geography as reported by AMD.
08
Contract structure
Short-term or spot sales carry different earnings quality than long-term or auto-renewing contracts — this shows how the company actually contracts with its customers.
AMD sells chips and systems to OEMs, ODMs, hyperscalers, distributors, and console makers. Most revenue is recognized when products ship; about 9% in 2025 came from custom products and development services recognized over time. The OpenAI and Meta agreements are multi-gigawatt purchase commitments tied to warrants.
Product sales
About 91% of FY2025 revenue
Typical term: Recognized at shipment
Custom products and development services
About 9% of FY2025 revenue
Typical term: Recognized over time
25% in 2023, mainly semi-custom console work.
- Multi-year / recurring
OpenAI and Meta GPU purchase agreements
Each starts with a binding commitment for 1 gigawatt, up to 6 gigawatts
Typical term: Warrant tranches vest with purchase milestones and AMD stock price targets up to $600 a share
Exercise price $0.01 per share.
Source: Form 8-Ks filed 2025-10-06 and 2026-02-24; Form 10-K (FY2025)
09
Alliances & capital ties
Equity stakes, joint ventures, and strategic partnerships disclosed across the 10-K, 8-Ks, and proxy statement.
Capital tie / equity stake
OpenAI
October 2025: a multiyear agreement to deploy 6 gigawatts of AMD GPUs, starting with a binding 1-gigawatt commitment for MI450 products, with a warrant for up to 160 million AMD shares at $0.01 that vests with purchase milestones and AMD stock price targets up to $600.
Source: Form 8-K (filed 2025-10-06)
Capital tie / equity stake
Meta Platforms
February 2026: an amended purchase agreement with a binding 1-gigawatt commitment and up to 6 gigawatt-equivalents of Instinct GPUs, plus a performance-based warrant for up to 160 million AMD shares at $0.01.
Source: Form 8-K (filed 2026-02-24)
Supply / distribution agreement
Sanmina
Bought ZT Systems' manufacturing business from AMD in October 2025; AMD says Sanmina will be its preferred partner for manufacturing capabilities in building complex AI solutions.
Source: Form 10-K (FY2025) — MD&A
10
Customers & suppliers
Who the company sells to and buys from. Companies rarely name either, so named counterparties come only from the company's own filings and press releases; otherwise this lists the concentration figures the 10-K discloses.
Customers
Hyperscale cloud providers, PC and server OEMs and ODMs, distributors, console makers, and embedded equipment makers.
Named by the company
- OpenAI — Binding commitment for 1 gigawatt of MI450 GPUs, up to 6 gigawatts.Form 8-K (filed 2025-10-06)
- Meta Platforms — Binding commitment for 1 gigawatt equivalent of Instinct GPUs, up to 6.Form 8-K (filed 2026-02-24)
What the filings disclose
- No customer reached 10% of revenue in 2024 or 2025; one Client and Gaming customer was 18% in 2023. (Form 10-K (FY2025), segment note)
Suppliers
Outside foundries make all of AMD's wafers, and third parties supply packaging, boards, memory, and software.
Named by the company
- TSMC — All wafers for microprocessors and GPUs at 7nm and smaller, plus FPGA and adaptive SoC products.Form 10-K (FY2025) — Item 1 and Item 1A
- GLOBALFOUNDRIES — Wafers for products at 12nm and 14nm.Form 10-K (FY2025) — Item 1
- Microsoft — AMD depends on Microsoft's operating systems supporting its x86 and graphics products.Form 10-K (FY2025) — Item 1A
11
Competitors & peers
Competitors the 10-K names, and the peer group the company itself chose in its proxy statement. Nothing here is this site's own pick.
AMD's 10-K names competitors in each segment and notes that smaller fabless companies offer Arm-based CPUs and accelerators, and that some customers are developing their own data center chips.
Competitors named in the 10-K
Peer group the company chose
2025 Executive Compensation Peer Group, from the proxy statement. Peers are companies the board considers comparable — for example when setting executive pay — not necessarily direct competitors.
Chosen by industry (business segment and key competitors), revenue of about 50%–200% of AMD's, and market capitalization; unchanged except for removing VMware after Broadcom acquired it.
- Adobesite ↗
- Marvell Technologysite ↗
- Analog Devicessite ↗
- Micron Technologysite ↗
- Applied Materialssite ↗
- NXP Semiconductorssite ↗
- Broadcomsite ↗
- NVIDIAsite ↗
- Cisco Systemssite ↗
- Oraclesite ↗
- Intelsite ↗
- Qualcommsite ↗
- IBMsite ↗
- Salesforcesite ↗
- Intuitsite ↗
- SAPsite ↗
- Lam Researchsite ↗
- Texas Instrumentssite ↗
Company names link to this site’s analysis where one exists; “site ↗” opens the company’s own website.
12
M&A history
Companies acquired over the last five years, plus older large acquisitions that still anchor a current business — what each was bought to do, and what happened afterward. From the 10-K, 8-Ks, and the company's press releases.
AMD uses acquisitions to build out its AI hardware and software stack, keeping design capabilities and selling manufacturing when it doesn't fit.
Pending (agreed Sep 2026)
World Labs Technologies
About $8.2B in AMD stock
An AI company.
- Stated purpose (company)
- Not stated in the 8-K.
Source: Form 8-K (filed 2026-09-28)
Mar 2025
ZT Systems
$3.2B cash plus 8.3 million AMD shares
An AI infrastructure systems maker; AMD kept the design business and sold manufacturing to Sanmina.
- Stated purpose (company)
- To deliver end-to-end AI solutions and accelerate design and deployment of AMD-powered AI infrastructure at scale.
Oct 2025 (sale)
ZT Systems manufacturing business — sold to Sanmina
$2.4B cash and 1.2 million Sanmina shares, plus up to $450M contingent
Since divestedData center infrastructure manufacturing.
- Stated purpose (company)
- AMD kept ZT's design business; Sanmina becomes AMD's preferred partner for manufacturing complex AI solutions.
Source: Form 8-K (filed 2025-10-27)
Figures as disclosed in the FY2025 10-K and 8-Ks.
13
Five years of financials
Each chart's axis holds a single unit (never mixing dollars, %, and $/share). The table's per-period header links to the filing the numbers came from.
Revenue over time
Unit: $M
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
Profit over time (operating → net)
Unit: $M
- Operating income
- Pretax income
- Net income
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
Margins over time
Unit: %
- Operating margin
- Net margin
formulaoperating income ÷ revenue × 100
formulanet income attributable to the company ÷ revenue × 100
Cash flow over time
Unit: $M (below zero = cash went out)
- Operating CF
- Investing CF
- Free CF
formulacash flow from operations − capital expenditures
termsFree cash flow (FCF) · Cash flow from operations (operating CF) · Capital expenditures (capex)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
Financial stability & capital efficiency
Unit: %
- Equity ratio
- ROE
formulatotal equity ÷ total assets × 100 (as reported in the 10-K)
termsStockholders’ equity · Total assets
formulanet income ÷ average equity (beginning + ending, ÷2) × 100 (as reported in the 10-K)
termsNet income (attributable to the company) · Stockholders’ equity
Earnings per share (EPS) and dividend per share
Unit: $
- EPS
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
| Line item | FY202110-K on EDGAR ↗ | FY202210-K on EDGAR ↗ | FY202310-K on EDGAR ↗ | FY202410-K on EDGAR ↗ | FY202510-K on EDGAR ↗ |
|---|---|---|---|---|---|
| Income statement ($M) | |||||
| Revenue | 16,434 | 23,601 | 22,680 | 25,785 | 34,639 |
| Operating income | 3,648 | 1,264 | 401 | 1,900 | 3,694 |
| Pretax income | 3,675 | 1,198 | 508 | 2,022 | 4,166 |
| Net income (attributable) | 3,162 | 1,320 | 854 | 1,641 | 4,335 |
| Revenue growthcalc(this year’s revenue − last year’s revenue) ÷ last year’s revenue × 100 | — | 43.6% | -3.9% | 13.7% | 34.3% |
| Operating margincalcoperating income ÷ revenue × 100 | 22.2% | 5.4% | 1.8% | 7.4% | 10.7% |
| Net margincalcnet income attributable to the company ÷ revenue × 100 | 19.2% | 5.6% | 3.8% | 6.4% | 12.5% |
| Balance sheet ($M) | |||||
| Total assets | 12,419 | 67,580 | 67,885 | 69,226 | 76,926 |
| Total equity | 7,497 | 54,750 | 55,892 | 57,568 | 62,999 |
| Interest-bearing debtSum of short- and long-term borrowings, notes/bonds payable | 313 | 2,467 | 2,468 | 1,721 | 3,222 |
| Equity ratio | 60.4% | 81.0% | 82.3% | 83.2% | 81.9% |
| ROE | 42.2% | 4.2% | 1.5% | 2.9% | 7.2% |
| Cash flow ($M) | |||||
| Operating CF | 3,521 | 3,565 | 1,667 | 3,041 | 7,709 |
| Investing CF | 686 | 1,999 | -1,423 | -1,101 | -5,533 |
| Financing CF | 1,895 | -3,264 | -1,146 | -2,062 | -431 |
| Free cash flowcalccash flow from operations − capital expenditures | 3,220 | 3,115 | 1,121 | 2,405 | 6,735 |
| Cash and equivalents | 2,535 | 4,835 | 3,933 | 3,787 | 5,539 |
| Per share & other | |||||
| EPS ($) | 2.57 | 0.84 | 0.53 | 1.00 | 2.65 |
| BVPS ($) | 6.21 | 33.96 | 34.59 | 35.49 | 38.65 |
| P/E (x) | 56.9 | 77.1 | 278.1 | 125.2 | 81.1 |
| EV/EBITDA (x)calc(market cap + interest-bearing debt − cash and equivalents) ÷ (operating income + depreciation & amortization) | 45.0 | 58.4 | 280.4 | 86.4 | 82.9 |
| P/B (x)calcP/E × EPS ÷ BVPS (= period-end share price ÷ book value per share) | 23.53 | 1.91 | 4.26 | 3.53 | 5.56 |
P/B and EV/EBITDA use each period’s period-end (fiscal year-end) figures, not the current share price. Figures without a "calc" tag are as reported in the Form 10-K (five-year selected financial data and the consolidated financial statements), pulled automatically from SEC EDGAR. Where a later filing restated a prior period, the restated figure is used.
14
Is ROIC above WACC?
ROIC (the return on money invested in the business) above WACC (the cost of raising that money) means the company is creating value. WACC is an estimate, so its assumptions can be adjusted below.
ROIC (FY2025)
4.7%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
e.g.$3,694M × (1 − 21%) ÷ $62,755M × 100 = 4.7%
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
WACC (this site’s estimate)
13.04%
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
e.g.Equity weight: $351.7B ÷ ($351.7B + $3.22B) = 99.1%
e.g.Debt weight: $3.22B ÷ ($351.7B + $3.22B) = 0.9%
e.g.WACC: 13.1% × 99.1% + 4.1% × (1 − 21%) × 0.9% = 13.04%
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
WACC 13.04% is this site’s estimate under the assumptions below (not a figure the company has published)
- Risk-free rate
- 4%
- β
- 1.66 (price-derived adjusted beta)
- Equity risk premium
- 5.5%
- Cost of equity
- 13.13%
- Cost of debt
- 4.07%
- Effective tax rate
- 21%
- Capital structure (equity : debt)
- 99% : 1%
ROIC over time, vs. WACC
Unit: % — bars = each period's ROIC, horizontal line = latest WACC. Bars above the line are green, below are red
- ROIC (above WACC)
- ROIC (below WACC)
- WACC 13.04%
formulaoperating income × (1 − tax rate) ÷ invested capital × 100 *invested capital = interest-bearing debt + total equity (average of beginning/ending)
termsOperating income · Effective tax rate · Invested capital · Interest-bearing debt · Total equity
formulacost of equity × equity weight + cost of debt × (1 − tax rate) × debt weight
termsCost of equity · Equity weight (E/(D+E)) · Cost of debt · (1 − tax rate) · Debt weight (D/(D+E)) · Market capitalization
Try different WACC assumptions
β and the equity risk premium are estimates with a real range of plausible values — move the sliders to check whether ROIC > WACC still holds. The defaults reflect 2026-09.
Initial β: 1.66 (price-derived adjusted beta. Raw β 1.99, R² 0.26, 130 weeks)
formula0.67 × β + 0.33 (β = the slope of weekly stock returns regressed on weekly market returns)
e.g.0.67 × 1.986 + 0.33 = 1.661
termsβ (beta)
Period 2024-04-05–2026-10-02, using S&P 500 ETF (SPY) as the market proxy. Source: Yahoo Finance price history.
formularisk-free rate + β × equity risk premium
e.g.4.0% + 1.66 × 5.5% = 13.1%
termsCAPM · Risk-free rate · β (beta) · Equity risk premium (market risk premium)
formulaP/E × net income ≈ period-end share price × shares outstanding (= market cap)
termsP/E · Net income (attributable to the company) · Market capitalization · Market value of equity
formulainterest expense ÷ interest-bearing debt × 100 (clamped to 0–10%; falls back to the risk-free rate if there’s no debt)
15
What the price implies (DCF)
A company's value can be written as its free cash flow divided by (cost of capital − perpetual growth). Working that backwards from the market's valuation shows how much growth the share price assumed — compared here with the company's actual past growth.
Growth the price implies (FY2025)
11.1%
Perpetual FCF growth: g = r − FCF ÷ EV = 13.0% − 2.0%
Past FCF growth (FY2021–FY2025)
+20.3%
Compound annual rate, 4 years
Past revenue growth (FY2021–FY2025)
+20.5%
Compound annual rate, 4 years
Inputs (FY2025): free cash flow $6.74B (operating CF − capex); enterprise value $344.37B = market cap $351.7B + debt $3.22B − cash and short-term investments $10.55B; r = WACC of 13.0% using this page’s default assumptions (β 1.66, risk-free 4.0%, market premium 5.5%).
Try your own assumptions
V = FCF ÷ (r − g). It starts at the implied growth rate, where the theoretical value equals today’s enterprise value.
Theoretical enterprise value
$354.47B
FCF $6.74B ÷ (13.0% − 11.1%)
Theoretical ÷ actual enterprise value
1.03x
Above 1x: these assumptions value the business above the market did
How sensitive the answer is
Theoretical ÷ actual enterprise value for each combination of r and g.
| g \ r | 11.0% | 12.0% | 13.0% | 14.0% | 15.0% |
|---|---|---|---|---|---|
| 0% | 0.18x | 0.16x | 0.15x | 0.14x | 0.13x |
| 2% | 0.22x | 0.20x | 0.18x | 0.16x | 0.15x |
| 4% | 0.28x | 0.24x | 0.22x | 0.20x | 0.18x |
| 6% | 0.39x | 0.33x | 0.28x | 0.24x | 0.22x |
| 8% | 0.65x | 0.49x | 0.39x | 0.33x | 0.28x |
A simplified model for seeing what the market price assumes, not a forecast or a target price. It treats free cash flow as growing at one constant rate forever; the result swings widely with small changes in r and g, and is undefined when g reaches r. Free cash flow here is operating cash flow minus capex, which is after interest — a full DCF of enterprise value would use cash flow before interest. Market cap and enterprise value use the fiscal year-end price, not today’s.
16
Earnings quality
The same reported profit can mean different things depending on whether it's backed by cash, driven by the core business, or the result of a one-off item. Four checks below.
- ✓
Operating CF ÷ net income: averages 1.88x
Profit is backed by cash coming in.
- ✓
Accrual ratio (latest): -4.6%
A small share of profit rests on accounting estimates.
- ✓
Core-earnings share (operating income ÷ pretax income): 89%
Most profit comes from core operations.
- ✓
Days sales outstanding: 60 → 67 days
No major slowdown in collecting on sales.
Operating CF vs. net income
Unit: $M — operating CF above net income means profit is backed by cash
- Operating CF
- Net income
formulacash flow from operations ÷ net income attributable to the company
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formula(net income − operating CF) ÷ average total assets × 100
termsNet income (attributable to the company) · Cash flow from operations (operating CF) · Total assets
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
Profit bridge (FY2025)
Unit: $M — what moved profit from operating income to net income
- Profit (each stage)
- Pushed profit up
- Pushed profit down
formulaoperating income ÷ income before income taxes × 100
termsOperating income · Income before income taxes (pretax income)
Source: each period's Form 10-K (SEC EDGAR). Latest: filed 2026-02-04
Receivables & inventory days
Unit: days — days grow when receivables or inventory build up faster than sales
- Days sales outstanding
- Days inventory outstanding
formulaperiod-end receivables ÷ revenue × 365
formulaperiod-end inventory ÷ revenue × 365
termsInventory · Revenue (net sales)
Worked examples (latest period)
formulacash flow from operations ÷ net income attributable to the company
e.g.$7,709M ÷ $4,335M = 1.78x
termsCash flow from operations (operating CF) · Net income (attributable to the company)
formulaoperating income ÷ income before income taxes × 100
e.g.$3,694M ÷ $4,166M × 100 = 89%
termsOperating income · Income before income taxes (pretax income)
formulaperiod-end receivables ÷ revenue × 365
e.g.$6,315M ÷ $34,639M × 365 = 67 days
17
Strengths & weaknesses
Strengths
1. AI accelerator momentum
Data Center revenue grew to $16.6B, and OpenAI and Meta have each committed to an initial gigawatt of Instinct GPUs, with up to 6 gigawatts each.
Evidence: Form 10-K (FY2025); 8-Ks filed 2025-10-06 and 2026-02-24
2. Broad portfolio
CPUs, GPUs, DPUs, AI network cards, FPGAs, and an open software stack (ROCm) let AMD offer full-stack and rack-scale solutions.
Evidence: Form 10-K (FY2025) Item 1
3. Revenue growth
Revenue rose from $16.4B (FY2021) to $34.6B (FY2025), and no customer reached 10% of revenue in 2024 or 2025.
Evidence: SEC EDGAR XBRL; Form 10-K (FY2025)
4. Console leadership
AMD is the market share leader in semi-custom game console chips.
Evidence: Form 10-K (FY2025) Item 1
Weaknesses
1. Low reported margins
Operating income was $3.7B on $34.6B of revenue in FY2025 (about 11%), weighed down by a $4.0B 'All other' loss outside the segments.
Evidence: Form 10-K (FY2025) segment note
2. Dilution risk
The OpenAI and Meta warrants could together add up to 320 million shares, against about 1.63 billion outstanding, and the pending World Labs deal is to be paid in stock.
Evidence: 8-Ks; SEC EDGAR XBRL
3. Dependence on TSMC
AMD relies on TSMC for all wafers for microprocessors and GPUs at 7nm and below.
Evidence: Form 10-K (FY2025) Item 1A
18
What draws investors to it
Why the stock can look attractive to investors — each point paired with what has to hold for it to stay true, and the opposing view. This is this site's analysis, not a recommendation to buy or sell.
P/E (FY2025)
81.1x
Price at fiscal year-end ÷ diluted EPS
Dividend yield (FY2025)
—
Dividends per share ÷ fiscal year-end price
Payout ratio (FY2025)
—
Dividends per share ÷ diluted EPS
FCF yield (FY2025)
1.9%
(Operating CF − capex) ÷ market cap
1. Second source for AI compute
AMD's Instinct GPUs now have multi-gigawatt commitments from OpenAI and Meta, and Data Center revenue grew 32% in 2025.
- What has to hold
- AMD delivers the MI450 generation on schedule and its software stack keeps up.
- The other side
- NVIDIA leads the market, and some customers are building their own accelerators.
Evidence: Form 10-K (FY2025); 8-Ks
2. Fast growth
Revenue more than doubled between FY2021 and FY2025, and FY2025 net income rose to $4.3B.
- What has to hold
- AI and PC demand stay strong.
- The other side
- The P/E at FY2025 year-end was about 81x, so expectations are high, and the beta of 1.99 is well above the market's.
Evidence: SEC EDGAR XBRL; this site's P/E and beta
AMD doesn't pay a dividend.
19
Resilience
How well the company could absorb a bad year: its financial buffer, how its revenue and profit held up in the worst year on record, and what the 10-K says about the business's exposure to shocks. Figures and filing statements only — no overall rating.
1. Financial buffer (FY2025)
Cash & short-term investments ÷ debt due within a year
6.0x
$10.55B vs. $1.75B
Interest coverage (operating income ÷ interest expense)
28.2x
$3.69B vs. $131M
Free cash flow ÷ dividends paid
—
2. Worst year in the record, and the recovery
| Figure | Worst year-over-year change | Back to the prior level? |
|---|---|---|
| Revenue | -3.9% in FY2023 ($23.6B → $22.68B) | Yes, by FY2024 |
| Operating income | -68.3% in FY2023 ($1.26B → $401M) | Yes, by FY2024 |
Covers only the 5 fiscal years on record (FY2021–FY2025), which may not include a full recession — the worst year here isn’t necessarily how the company would fare in a severe downturn.
3. Business resilience (from the 10-K)
Strong balance sheet
About $10.6B of cash and short-term investments against about $3.2B of debt at year-end 2025.
Source: SEC EDGAR XBRL
Diversified segments
Data Center, Client and Gaming, and Embedded serve different end markets.
Source: Form 10-K (FY2025), segment note
Supply concentration
Reliance on TSMC for leading-edge wafers is a single point of failure.
Source: Form 10-K (FY2025), Item 1A
Regulatory exposure
Export controls can halt shipments of specific products to China, as in 2025.
Source: Form 10-K (FY2025), MD&A
20
Risks (including geopolitical)
Starting from the 10-K's Risk Factors section, organized by category — geopolitical, currency, raw materials, regulatory, disaster, and more — with impact and likelihood assessed by this site.
Risk map
Vertical = impact on results, horizontal = likelihood. Upper right = most severe. Numbers match the list below (placement is this site’s own assessment).
Likelihood →
"Company disclosure" vs. "this site’s assessment"
The description and mitigation for each risk are this site’s summary of the 10-K’s "Risk Factors" section. Impact and likelihood are this site’s own assessment, not the company’s — where the company discloses its own likelihood assessment, that is noted in the summary.
Impact is judged from how large the affected business is relative to total revenue/profit, and from the risk’s track record of moving results in the past. Likelihood is judged from the filing’s wording and the current business environment (already occurring, or recurring).
Geopolitical risk highlights
- [1]Export controls on China
- 1Geopolitical
Export controls on China
- Company disclosure (summarized from the 10-K)
- New U.S. restrictions led to about $800M of MI308 inventory charges in 2025; China (including Hong Kong) was $7.8B of revenue by geography.
- Company’s stated mitigation
- Licenses granted for some China-based customers.
- This site’s assessment
- Impact High / Likelihood High
- 2Supply chain
Foundry concentration
- Company disclosure (summarized from the 10-K)
- All 7nm-and-smaller CPU and GPU wafers come from TSMC, and AMD can't guarantee its suppliers will meet its needs.
- Company’s stated mitigation
- GLOBALFOUNDRIES supplies wafers for 12nm and 14nm products.
- This site’s assessment
- Impact High / Likelihood Med
- 3Competition & technology shift
Competition from NVIDIA, Intel, and custom chips
- Company disclosure (summarized from the 10-K)
- NVIDIA leads in discrete GPUs, Intel competes in CPUs (and partnered with NVIDIA in September 2025), and some customers are developing their own data center chips.
- Company’s stated mitigation
- Annual Instinct roadmap and full-stack solutions.
- This site’s assessment
- Impact High / Likelihood High
- 4Customer/supplier concentration
Large AI deals
- Company disclosure (summarized from the 10-K)
- The OpenAI and Meta commitments are large, and warrant vesting depends on purchases and AMD's stock price.
- Company’s stated mitigation
- Binding initial 1-gigawatt commitments.
- This site’s assessment
- Impact Med / Likelihood Med
21
What to watch going forward
- Delivery of the first gigawatt of MI450 GPUs to OpenAI and Meta, which triggers the first warrant tranches.
- Closing of the $8.2B World Labs acquisition, paid in AMD stock.
- China export licensing.
- Data Center operating margin.
22
Source documents
This page's financial figures come from the Form 10-Ks listed below. Check the original filings for full detail.
Last updated
Analysis last edited: October 4, 2026 · Financial data fetched: October 4, 2026 14:41 (SEC EDGAR) · Source 10-K filed: February 4, 2026
Next update expectedAfter FY2026’s 10-K is filed (roughly 60–90 days after fiscal year end (sooner for larger filers)), financials and analysis will be refreshed.
This page is this site’s own analysis based on public information, and does not represent Advanced Micro Devices, Inc.’s views. It is not a recommendation to buy or sell any security, and this site does not guarantee the accuracy of any figure or statement here. Always verify against the original source documents before making an investment decision.