In the fourth quarter, Advanced Micro Devices delivered revenue of $10.3 billion, up 34% year-over-year, outperforming consensus estimates on both the top and bottom lines. Data center sales reached a record $5.4 billion, increasing 39% from the prior year on strong demand for high-performance server CPUs and GPU accelerators, while the client segment generated $3.1 billion in CPU revenue, up 34% as the company gained market share with its Ryzen family. Gaming and semi-custom products added $843 million, growing 50% year-over-year. These results translated into operating income of $1.8 billion GAAP (up 101%) and $2.9 billion non-GAAP (up 41%), underscoring the company’s ability to scale profitably.

Gross margin expanded to 54% on a GAAP basis and 57% non-GAAP, each up 3 percentage points year-over-year, reflecting improved product mix and operational leverage. Operating expenses increased 27% GAAP and 42% non-GAAP, driven by strategic investments in R&D and sales capacity. For Q1, management guided revenue to approximately $9.8 billion ± $300 million—a midpoint growth rate of 32% year-over-year—with non-GAAP gross margin expected at 55%. This outlook suggests sustained demand for AI and computing workloads despite a typical seasonal decline in consumer PC sales.

Looking beyond the quarter, AMD highlighted a structural gross-margin expansion opportunity as its 2 nm products ramp through 2026, leveraging its foundry relationship and chiplet design advantage. The company’s systems-level pivot includes a deepening partnership with a leading AI software developer, positioning it to capture accelerating AI infrastructure spending. Combining the current valuation with these long-term drivers yields an implied upside of over 100% to $477 per share within the next 12–16 months, according to the chief investment analyst at a major family office.