Can Advanced Micro Devices EPYC Drive Data Center Revenue Growth?

Advanced Micro Devices AMD is benefiting from its strong presence in the data center market, which is driven by the widespread adoption of its EPYC processors. In the first quarter of 2025, data center revenues surged 57.2% year over year to $3.674 billion, accounting for 49.4% of total revenues. 

The company’s strong adoption of fifth-gen EPYC Turin processors and expanding Instinct AI accelerator deployments across hyperscalers and enterprises have also been major growth drivers for its success. Hyperscalers like AWS, Google, and Oracle launched more than 30 new EPYC-powered cloud instances, while enterprise adoption doubled among Forbes 2000 customers in the first quarter of 2025.

EPYC processors are now deployed by all top 10 telecom, aerospace, and semiconductor companies. These processors are also gaining momentum in automotive, manufacturing, and energy sectors.  

AMD’s expanding EPYC portfolio has been a key catalyst. The company recently announced that Nokia has adopted its fifth-gen EPYC 9005 Series processors for the Nokia Cloud Platform.   

These processors will enhance performance per watt for containerized workloads, which are important to 5G Core, edge, and enterprise applications. This integration supports telecom networks in meeting rising data demands while improving energy efficiency and reducing environmental impact.

Advanced Micro Devices Faces Stiff Competition

AMD faces stiff competition in the data center market from industry giants like Intel Corporation INTC and NVIDIA NVDA. 

Intel is heavily investing in technologies like its Xeon processors and AI accelerators to compete more effectively with AMD’s EPYC server processors. Recently, Intel has expanded its AI and data center portfolio with the introduction of the Intel Xeon 5 processor.  In the first quarter of 2025, Datacenter and AI Group revenues improved 8% year over year to $4.13 billion, driven by a solid demand for host CPUs for AI servers and storage compute.

NVIDIA is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA’s Hopper and Blackwell architectures, which are aiding data center revenues. In the first quarter of fiscal 2026, data center jumped 73.3% year over year and 9.9% from the previous quarter to $39.1 billion.

AMD’s Share Price Performance, Valuation and Estimates

Advanced Micro Device shares have gained 1.4% year to date (YTD), underperforming the broader Zacks Computer & Technology sector’s return of 2.4% and the Zacks Computer - Integrated Systems industry’s increase of 16.7%.

AMD Performance

AMD stock is trading at a premium, with a forward 12-month Price/Sales of 5.86X compared with the industry’s 3.59X. AMD has a Value Score of D.

AMD Valuation

The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 56 cents per share, which has declined 13.6% over the past 30 days, indicating an 18.84% decline year over year.

Advanced Micro Devices, Inc. Price and Consensus

Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote

The consensus mark for 2025 earnings is pegged at $3.97 per share, which declined 2.9% over the past 30 days, suggesting 19.94% 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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This article originally published on Zacks Investment Research (zacks.com).

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