CHANDLER CONVERSE
cconverse@cleveland-research.com
(216) 649-7280
HENRY GERLACH
hgerlach@cleveland-research.com
(216) 649-7206
BRIDGET RASURE
brasure@cleveland-research.com
(216) 649-7260
July 16, 2025
Advanced Micro Devices Inc. (AMD: $121.73 – BUY)
Important disclosures can be found in Appendix
AMD: Hyperscale CPU Demand Looks Strong and Server CPU Share More
Favorable; GPU Revs Likely Higher on China License Approval and Small US Gains
(Cleveland Research)
Key Takeaways
1. Server CPU units likely a bit higher tied to ongoing US hyperscale strength, fairly stable demand across other segments.
2. AMD Server CPU share likely higher as Turin ramps, with 2026 share higher on growing INTC roadmap concerns.
3. GPU units had been tracking to 500-550k, with MI308 approval the low end of prior 700-800k range may be attainable.
4. PC TAM forecasts tracking flattish with AMD seen on track for 1-3 pts share gains; gaming demand outperforming.
5. Conclusion – Our estimates are ahead of cons on strong Server CPU demand from US hyperscaler, share expansion in
PC and Server CPU, pockets of better GPU demand at US customers and news that AMD will be able to resume MI308
shipments (Cleveland Research).
AMD Guidance (non-GAAP)
• Revenue: $7.1-7.7B (+27% Y/Y), Gross Margins: ~54% ex inventory charges; 43% incl. charges
Read Thru to Our Model & FactSet Consensus (all est. Non-GAAP)
• Modeling 2Q25 revs $7.6B (+30.7%) vs. cons $7.4B (+27.0%) – EPS $0.52 vs. cons $0.48.
• Modeling 3Q25 revs $8.9B (+30.6%) vs. cons $8.3B (+20.9%) – EPS $1.27 vs. cons $1.12.
• Modeling 2025 revs $33.2B (+29.0%) vs. cons $31.9B (+23.1%) – EPS of $4.17 vs. cons $3.84.
• Modeling 2026 revs $39.8B (+19.8%) vs. cons $40.0B (+18.1%) – EPS of $6.37 vs. cons $5.81.
Short-Term Conclusion
Our 2Q and 3Q estimates moved higher tied to strong Turin ramp starting in 2Q, signs of more significant share progress
in Server CPU, and higher DC GPUs – particularly in 3Q when we expect AMD will be able to resume MI308 shipments, but
also tied to small order increases at some US customers. Feedback suggests Hyperscale CPU demand higher than prior
forecasts on stronger general purpose cloud buildouts and ongoing AI strength – more than offsetting impact from
potential pockets of China inventory & mix shifts to AI from general purpose at US OEMs. PC demand forecasts similar –
calling for low-single digit growth Y/Y and AMD taking 2-3 pts of share. Gaming demand also remains strong – with contacts
suggests double-digit Gaming PC growth as within reach as long as supply continues to improve. Our 2Q and 3Q forecasts
are higher, with revs ahead of consensus in both Q’s – cons likely does not reflect recent MI308 license approval.
Long-Term Conclusion
Our 2026 revs moved higher as well tied to strong Server CPU demand, signs that AMD share progress in Server CPU may
be more pronounced due to less confidence in INTC roadmaps, and expectations AMD benefits from strong AI Capex
spending in 2026 (and potentially gets a full year of China GPU revs). See Server CPU revs growing 31% in 2025 (higher vs
prior 29%) and another 29% in 2026. We now are forecasting 2025 GPU revs to ~$7B vs prior $6.3B, growing to ~$10B in
2026 vs prior $9.3B. Feedback on Gaming & PC demand in 2026 appears fairly limited to date – but some expect the Win10
EOL to become more meaningful in 2026. Our CY25 forecasts moved higher on server CPU and GPU strength and remain
ahead of cons – cons likely does not reflect recent MI308 license approval.
Advanced Micro Devices Inc. (AMD) – CRC
July 16, 2025
Page 2
CHANDLER CONVERSE
cconverse@cleveland-research.com
(216) 649-7280
HENRY GERLACH
hgerlach@cleveland-research.com
(216) 649-7206
BRIDGET RASURE
brasure@cleveland-research.com
(216) 649-7260
Themes from our Research
1. Demand outlooks similar to prior with stronger hyperscale offsetting China and enterprise uncertainty. Feedback
in our recent work suggests a few changes vs. our prior TAM expectations. For the second consecutive update, we
have seen signs of hyperscale server TAM expectations improving. We heard generally stable China demand though
some suggested potential digestion / CPU unit headwinds at one China CSP (yet to show up for other components in
our coverage) – unclear whether MI308 / H20 licenses may or may not bolster forecasts. Enterprise feedback was
similar to slightly lower vs. prior with modest unit expectations for the year – though the mix of server units appears
to have shifted somewhat toward GPU servers. Overall, we continue to expect 2025 server units grow in the mid-
single digit % Y/Y range with AMD share gains progressing.
• Hyperscale – units likely higher. We continue to hear a range of high-single digit to low-double digits % growth in
2025 – though we hear component purchase plans from Hyperscalers have improved twice in the last 60-90 days.
Feedback suggests AI spending plans remains strong – with the recent upside coming from general purpose cloud
improvement – seen as likely a benefit across all CSPs including MSFT, AMZN, ORCL, and GOOG.
• Enterprise – unit growth likely toward the lower end of our prior low to mid-single digit % Y/Y range for
2025. OEMs note some large bids up for grabs in 2H25 and hope that demand improves exiting the year/into 2026
should macro uncertainty wane.
• China – see potential for modest CPU unit downside in China tied to some inventory build at ByteDance – with
some suggesting CSP server units could trend closer to up mid-single digits Y/Y (prior ~10%). While we hear
potential downside for ByteDance CPU orders – we have yet to see this materialize for other components, and
see potential that demand could improve tied to H20 / MI308 restrictions being lifted. Tencent & BABA demand
appears strong and stable. Non-CSP demand in China likely remains more tempered.
We are modeling EPYC CPU revs at $2.3B in 2Q and $2.4B in 3Q (both higher vs prior $2.2B) as Turin ramps and share
sounds more favorable. See EPYC revs growing 27% in 2026 vs prior 25% on signs share gains may be more pronounced
that previously expected.
2. AMD GPU Commentary slightly better, but expect more modest ASP improvement as AMD faces competitive
pressure; expect AMD see’s benefit from China license. We hear AMD likely making some progress at select CSPs –
hear AMD in a good position with core customers (ORCL, META), seeing some growing test at AMZN / GOOG and
interest waning at MSFT. Feedback suggests NVDA likely maintains the majority of GPU wallet share and some see
Hyperscalers prioritizing internal silicon ecosystem development over AMD’s. Additionally, customers remain
skeptical regarding AMD’s ability to lunch full MI355 based rack systems (that are competitive with NVL racks) and
others note AMD’s library still needs further improvement before seeing broader adoption. We expect MI355 to grow
relative to MI300 after a slow MI325 rollout – but likely at a modest pace. Price / performance noted as much better
in MI355 vs. MI325/300. Feedback in our work throughout C1H25 has noted AMD more aggressive with price to move
product. While most note that actual MI355 pricing is TBD – some expect pricing in the $16-19k range with MI400
somewhere between $20-25k. Customers see less pricing power for AMD (vs. NVDA) due to the need to maintain
AMD Earnings, Estimates and Market Data Summary
Actual/Est. Cons. Actual/Est. Cons. Revs ($mm)
1Q25A $0.96 1Q26E $1.27 $1.18 FY23 $22,680 Mkt. Cap $188,391
2Q25E $0.50 $0.57 2Q26E $1.40 $1.30 FY24 $25,785 FY25 P/E 28.69
3Q25E $1.21 $1.12 3Q26E $1.57 $1.53 FY25E $32,472 FY26 P/E 19.77
4Q25E $1.40 $1.30 4Q26E $1.67 $1.70 FY26E $38,028 FY25 P/S 5.80
Dec-25E $4.07 $3.95 Dec-26E $5.91 $5.77 FY26 P/S 4.95
Source: Cleveland Research estimates, FactSet Consensus
Advanced Micro Devices Inc. (AMD) – CRC
July 16, 2025
Page 3
CHANDLER CONVERSE
cconverse@cleveland-research.com
(216) 649-7280
HENRY GERLACH
hgerlach@cleveland-research.com
(216) 649-7206
BRIDGET RASURE
brasure@cleveland-research.com
(216) 649-7260
competitive price / performance. Feedback in our latest work suggested ~500-550k units likely in CY25 vs. 470-475k
in CY24 – lower vs. our 700-800k assumptions from earlier in the year. Now that AMD is expected to receive license
to sell MI308 GPUs to China – we see our prior range as possible again but have yet to solicit any feedback post-ban.
We now forecast DC GPU revs to $7B vs prior $6.3B tied to signs of new demand at select customers and expectations
AMD may be able to recover ~$500m of the MI308 demand they had expected in 2H25 – note AMD had previously
noted a $800m impact to 2H25 revs (after a $700m impact in 2Q). We see 2026 revs at ~$10B vs prior $9.3B tied to
signs on ongoing AI spending strength. Concrete unit feedback on AMD remains limited in our current work.
3. Server share feedback sounds more constructive on AMD in near / medium term; ARM likely to put pressure on
X86 over time, seen impacting INTC sooner vs. AMD. AMD share gains appear ongoing across customers. We continue
to expect 5%+ gains in Hyperscale this year. See AMD OEM share gains more modest and China gains in the 5-10%
range – though ByteDance order changes could shift the timing of some of these gains into 2026, potentially benefiting
INTC near-term. Some Hyperscalers who previously seen a path for INTC stabilization appear less confident as INTC
has shifted their focus to 14A and away from 18A – resulting in some roadmap skepticism. Feedback suggests AMD
Turin ramping well in Hyperscale now. AMD sounds more responsive to hyperscale and OEM customers’ product
needs – helping customers justify additional share shifts. Hear Vienna well positioned to continue share gains in 2026.
Initial whitepapers continue to look favorable for Clearwater and Diamond Rapids – but OEMs and Hyperscalers
appear more skeptical regarding INTC’s ability to deliver whitepaper performance and execute on roadmap plans.
ARM feedback appears notably stronger – with some customers suggesting ARM could eventually account for 20%
of Hyperscale CPU units over the next 3-5 years (already 50%+ of AMZN today). The channel expects this impact to be
felt in the near-term by INTC and expects AMD may face challenges maintaining their TCO advantage over the long-
term given ARM power savings potential.
Source: Cleveland Research
Our AMD Server share forecast for 2025 moved higher to 43.3% vs prior 42.6%, with 2026 forecasted to see additional
Server CPU share gains. Forecast 2026 AMD share to 45.3% vs prior 44.5%. See ARM share 9-10% in 2025, growing
to the low teens in 2026. Some note CSPs likely to reach 20-30% ARM share over next 3-5 years (AMZN already more
than 50%).
93.8%
85.9%
79.5%
70.5%
61.7%
53.8%
47.0%
42.8%
6.1%
13.8%
18.9%
25.5%
31.3%
38.2%
43.3%
45.3%
0.1%
0.4%
1.5%
4.0%
7.0%
8.0%
9.8%
12.0%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2019 2020 2021 2022 2023 2024 2025e 2026e
Server CPU Market Share (units)*
*not incl Comms
Intel AMD ARM
Advanced Micro Devices Inc. (AMD) – CRC
July 16, 2025
Page 4
CHANDLER CONVERSE
cconverse@cleveland-research.com
(216) 649-7280
HENRY GERLACH
hgerlach@cleveland-research.com
(216) 649-7206
BRIDGET RASURE
brasure@cleveland-research.com
(216) 649-7260
4. PC unit TAM forecasts largely unchanged in CY25 – calling for low single digit % Y/Y growth. PC outlooks continue
to call for a flattish TAM – we expect LSD% Y/Y growth after stronger 1H25 demand and expectations shipments are
more evenly split between 1H and 2H. Some forecasts continue to lean skeptical on Y/Y unit growth – flagging potential
for moderating demand in late-C3 or C4Q. Gaming unit outlooks remain strong for double-digits % Y/Y growth in 2025
– similar to prior up 5%+ Y/Y unit growth and potential for upside should GPU supply improve from NVDA and AMD.
AI PC traction sounded mixed in our latest round of work – some see mix approaching 10-20% of PC purchases in 2H25
with others more conservative and expect AI PC ~5-8% of mix. Contacts note steady ecosystem progress, but see
limited use cases and security concerns as likely to limit AI PC mix expansion. Mix in 2026 also unclear – though see
more competitive pricing on ARM based PC SKUs as potentially benefitting adoption.
Our Client revenue assumption is +43% (similar to prior) in 2025 with revs close to evenly split between 1H and 2H.
Revs driven by ASPs, wins in higher-end sockets and share progress. Expect growing moderates to 5.2% in 2026 (prior
4.4%).
5. PC share feedback continues to call for AMD gains – though at a more modest pace vs. Server. Continue to see AMD
gaining share vs. INTC in 2025 – hear increasing potential these gains persist in 2026. Feedback suggests AMD likely
gains 2-3 pts in 2025 – similar to prior. We also hear INTC shifting customer focus away from 18A and to 14A –
potentially resulting in lower confidence in PC roadmaps. See potential this impacts INTC CPU share in 2026. ARM
feedback sounded mixed in our work – some note improving AI PC mix and others consistent vs. prior. Feedback on
2026 AI PC mix also unclear. Any expansion of AI PC mix seems likely to benefit QCOM more vs. other ARM peers.
NVDA maintains overwhelming share of PC GPU, though constraints on 50-series supply appears to result in strong
AMD GPU demand as well.
Source: Cleveland Research Company
We are forecasting AMD PC CPU share gains of 1-3pts in 2025 (unchanged) after 2-3 pt gains in 2024 – additionally
expect QCOM/ARM to take share within overall PC market. AMD likely at least maintains share in 2026.
94.5%
93.0%
92.0%
89.0%
83.0%
79.5%
79.0%
77.0%
79.0%
76.3%
74.7%
74.2%
5.5%
7.0%
8.0%
11.0%
17.0%
20.5%
21.0%
23.0%
21.0%
23.8%
25.3%
25.8%
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025e 2026e
Intel and AMD PC Mkt Share
Intel PC Unit Share AMD PC Unit Share
Advanced Micro Devices Inc. (AMD) – CRC
July 16, 2025
Page 5
CHANDLER CONVERSE
cconverse@cleveland-research.com
(216) 649-7280
HENRY GERLACH
hgerlach@cleveland-research.com
(216) 649-7206
BRIDGET RASURE
brasure@cleveland-research.com
(216) 649-7260
APPENDIX
Important Disclosures
Important Disclosures can be found at www.cleveland-research.com/clients/disclosures
Companies Mentioned
Advanced Micro Devices (AMD: $121.73 – BUY)
Intel (INTC: $20.48 – NEUTRAL)
Nvidia (NVDA: $142.63 – BUY)
Qualcomm (QCOM: $155.41 – NEUTRAL)
Arm Holdings (ARM: $138.61 – NOT RATED)
Alphabet Inc (GOOG: $177.63 – BUY)
Amazon.com Inc (AMZN: $216.98 – BUY)
Microsoft Corp (MSFT: $472.75 – BUY)
Meta Platforms Inc (META: $694.06 – BUY)
Oracle Corp (ORCL: $177.15 – BUY)
Alibaba Group Holding Limited (BABA: $116.97 – NOT RATED)
Cleveland Research Company - Ratings Distribution
Rating
Percent
Buy
26%
Neutral
74%
Underperform
0%
Disclosures
Buy: The stock’s return is expected to exceed the market due to superior fundamentals and positive catalysts.
Underperform: The stock’s total return is expected to underperform the market due to weak fundamentals and a lack of catalysts.
Neutral: The stock is expected to be in line with the market due to full valuation and/or a lack of catalysts.
Valuation and Risk: Price targets are established under various valuation methods including P/E, P/S, EV/EBITDA on financial estimates based on forward earnings.
Price targets are not established for every stock. The price target’s effectiveness may be affected by various outside factors. Risk assessments can be found in the most
recent research on these stocks.
Other Disclosures: We, Chandler Converse, Henry Gerlach, and Bridget Rasure, certify that the views expressed in the research report(s) accurately reflect our personal
views about the subject security(s). Further, we certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendations
or views contained in the research report(s). CRC, its principals and partners, have investments and own a minority interest in a fund manager which may or may not
have a position in this security in the funds it manages and oversees. Cleveland Research Company provides no investment banking services of any type on this or any
company. Proprietary research and Information contained herein which forms the basis for findings or opinions expressed by Cleveland Research Company may be used
by Cleveland Research for other purposes in the course of compensated consulting and other services rendered to third parties. The information transmitted is intended
only for the person or entity to which it is addressed. Any review, retransmission, dissemination or other use of, or taking of any action in reliance upon, this information
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