Advanced Micro Devices (AMD) has just wrapped up FY 2025 with fourth quarter revenue of US$10.3b and basic EPS of US$0.99, alongside trailing twelve month revenue of US$34.6b and EPS of US$2.63 that underscore the scale of its current earnings power. Over recent quarters, the company has seen revenue move from US$7.7b in Q2 2025 and US$7.4b in Q1 2025 to US$9.2b in Q3 2025 and US$10.3b in Q4 2025, with quarterly EPS shifting from US$0.44 to US$0.47, US$0.72 and then US$0.99 over the same stretch. This sets the stage for investors to focus on how these results tie into a fatter profit margin profile.

See our full analysis for Advanced Micro Devices.

With the headline numbers on the table, the next step is to see how this earnings run lines up against the widely shared narratives around AMD's growth, quality of profits, and long term story.

159.8% earnings growth reshapes profit picture

• On a trailing 12 month basis, net income excluding extra items is US$4.3b with EPS at US$2.63, compared with US$1.6b and EPS of US$1.01 a year earlier, which is described as 159.8% earnings growth and an increase in net margin from 6.4% to 12.3%.
• What stands out for the bullish view is how this earnings ramp lines up with the forecast that earnings could grow about 29.9% per year, as the latest trailing numbers already reflect:
  • Revenue over the same trailing period is US$34.6b versus US$25.8b a year earlier, while net margin sits at 12.3%, so bulls can point to both higher profit level and fatter margins supporting their growth argument.
  • At the same time, critics of the bullish case may flag that such a large year over year earnings jump sets a high bar for those growth forecasts to keep looking reasonable in future updates.

Analysts who frame AMD as a long term earnings compounder will likely pay close attention to how this big profit step change squares with the growth expectations baked into their models and targets. 📊 Read the full Advanced Micro Devices Consensus Narrative.

US$34.6b trailing revenue and 12.3% margin

• Trailing 12 month revenue stands at US$34.6b with net income excluding extra items of US$4.3b, which implies a 12.3% net margin versus 6.4% a year earlier on US$25.8b of revenue and US$1.6b of net income.
• Supporters of the bullish narrative often talk about AMD as a high quality earner, and this margin profile gives them some concrete backing:
  • Quarterly figures for FY 2025 show net income excluding extra items of US$709m, US$768m, US$1.2b and US$1.6b from Q1 to Q4 respectively, alongside revenue rising from US$7.4b to US$10.3b, which lines up with the idea of better earnings efficiency as the business scales.
  • Because the analysis flags past earnings as high quality, margin expansion from 6.4% to 12.3% is likely to be used by bulls as evidence that profit growth is not just a one off, even though future results would still need to support that claim.

P/E of 73.5x versus 288.07 target and DCF fair value

• The stock trades on a P/E of 73.5x compared with a peer average of 62.7x and a US Semiconductor industry average of 40.6x, while the same dataset cites an analyst target price of US$288.07 and a DCF fair value of US$356.25 against a current share price of US$192.50.
• Skeptics worried about valuation risk point to the premium P/E, but the numbers paint a more mixed picture that both bullish and cautious investors will study closely:
  • On one hand, the analyst target of US$288.07 and the DCF fair value of US$356.25 are both higher than the US$192.50 share price, with the summary describing roughly 49.6% implied upside from analyst estimates, which supports the view that current pricing does not fully reflect reported earnings growth.
  • On the other hand, the fact that AMD trades above peer and industry P/E levels means valuation focused investors can still reasonably question how much of that 159.8% earnings growth and the forecasted 29.9% annual earnings growth is already embedded in the multiple.

If you want to see how this valuation premium stacks up against growth, margins and risks in a single place, Stay updated on the most important news stories for Advanced Micro Devices by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Advanced Micro Devices.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Advanced Micro Devices's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

See What Else Is Out There

For all the strong recent earnings, AMD's premium 73.5x P/E and rich pricing versus peers highlight valuation risk for investors watching entry points closely.

If that premium multiple makes you uneasy about paying up for growth, you may want to line up alternatives using our 55 high quality undervalued stocks and see which companies the data currently paints as better value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.