AMD at Bank of America Conference: AI Innovations and Financial Growth

On Tuesday, 03 June 2025, Advanced Micro Devices (NASDAQ:AMD) presented at the Bank of America Global Technology Conference 2025. The discussion, led by CFO Jean Hu and Head of Investor Relations Matt Ramsay, highlighted AMD’s strategic advancements in high-performance computing and AI, alongside financial achievements and challenges. While AMD celebrated a strong product portfolio and future growth prospects, it also addressed export restrictions impacting revenue.

Key Takeaways

• AMD reported a 36% increase in Q1 2025 revenue year-over-year.
• Export license restrictions affected Q2 data center GPU revenue by $700 million.
• The MI300 AI accelerator has generated over $5 billion in revenue since its launch.
• AMD anticipates a significant growth phase in 2025, driven by new product launches.
• Gross margins are expected to improve modestly in the second half of 2025.

Financial Results

AMD’s financial performance in Q1 2025 showcased robust growth:

• Revenue increased by 36% year-over-year.
• Data center revenue surged by 57% year-over-year.
• Client and gaming revenue rose by 28% year-over-year.
• Earnings per share improved by 55% year-over-year.

For Q2 2025, AMD maintains a revenue guidance of $7.4 billion, reflecting a 27% increase compared to the previous year. However, export restrictions on the MI300A have impacted data center GPU revenue by $700 million. The client and gaming sectors are expected to grow in the high teens sequentially, while data center business may see a decline due to these restrictions.

Operational Updates

AMD continues to make strides in AI and high-performance computing:

• The MI300 series has exceeded $5 billion in revenue since its December 2023 launch.
• The MI325 was introduced in December 2024, with the MI350 set to launch on June 12, 2025.
• AMD emphasizes its advantage in AI inferencing, supporting complex models like ChatGPT-4.

The company’s strategy includes enhancing system-level solutions through the acquisition of ZT, which strengthens AMD’s design and manufacturing capabilities.

Future Outlook

Looking ahead, AMD envisions 2024 as a foundational year, with 2025 marking a pivotal point for revenue growth and earnings expansion:

• The MI350 launch in the second half of 2025 is expected to drive growth.
• AMD plans to introduce the MI400 generation next year.
• A cyclical upturn in the embedded business is anticipated.

The company remains focused on expanding customer engagement and enterprise market strategies in 2025.

Q&A Highlights

During the Q&A session, several key insights were shared:

• The MI300 family excels in AI inferencing, powering models like ChatGPT-4 and Microsoft Copilot.
• The MI350 is expected to deliver a 3-5x performance increase in inference tasks.
• AMD’s client business performance is driven by a richer product mix and increased average selling prices.
• The acquisition of ZT enhances AMD’s system-level design capabilities.

AMD remains confident in its ability to navigate challenges and capitalize on opportunities in the AI and high-performance computing markets. For a detailed review, refer to the full transcript below.

Full transcript - Bank of America Global Technology Conference 2025:

Vivek Arya, Analyst, BFA: And welcome everyone to day one of the BFA Tech Conference. I’m Vivek Arya from the semiconductor, semi cap equipment team. Really great to see you all here and really delighted and honored to have the team from AMD join us this morning, Jean Hu, CFO and Matt Ramsay, the Head of Investor Relations and prior from our tribe of proud sell side semiconductor analysts. So really glad to have both of you here. What I’ll do is I’ll go through my list of questions, but please feel free to raise your hand if you have any question that you would like to bring up.

But a really warm welcome to you, Gene, and I’m really glad that you’re here with us. Thank you. And maybe as a start, Gene, give us a state of the union, way you see it, lot of macro crosscurrents and then when AMD itself has kind of been on this very interesting journey in in the road towards AI. So what do you find exciting right now? And then we can go through some of the nitty gritty of of each of the segments.

Jean Hu, CFO, AMD: Yeah. Yeah. So, Vivek, thank you so much for having us. It’s great to be here and thank you all for joining us today. Maybe I’ll start to just take a step back to set the stage about the AMD.

When you think about the 2024 for AMD was the really transformation year. During the year, we really made a significant progress of building our high performance computing platform, which include the CPUs, GPUs, and the embedded processing. So specifically, if you think about AI market, what we have done is since the launch of MI 300, which is literally December 2023, the first year of the launch, we ramped the revenue to exceed 5,000,000,000. We made a very significant progress with our hardware road map, which is annual cadence introduced MI three twenty five in 12/02/2024, and also accelerated the MI three fifty. We are actually launching next week, so hopefully, all of you can join to listen to our MI three fifty five launch on June 12.

And most importantly, we also made a significant progress in software with the rocking, like, really maturing AMD Instinct and AMD software are now powering some of the most complex and the most compelling AI models, right, with our top customers at scale. So that’s really exciting. On the CPU side, we actually have the best product portfolio with both our server CPU and the client on the CPU. It it’s very exciting to build that foundation. Now when you think about the we’re looking to 2025, we started the 2025 with a very strong q one financial performance.

Revenue was up 36% year over year, driven by data center was up 57%, and the client on the gaming was up 28%. So really exciting. And the earnings per share, which I really focus on, was up 55%. So exciting time. When we look at the q two, that’s, Vivek, what you’re saying is, you know, there are a lot of noises and a lot of uncertainties.

And one of the things that really impact AMD is the export license requirement for m I three zero eight. When you think about these, we were expecting the first half of data center revenue to be flattish with the second half of twenty twenty four as we were going through the product transition from MI three twenty five to MI three fifty. But because of the ex export license requirement, we got impacted by 700,000,000 revenue in q two alone with the data center GPU business. So it was quite significant. Of course, you know, in China, because of the deep sea, you did see the surge of the demand for GPUs during that period of time.

And what we feel really good about it is we actually guided the q two at 7,400,000,000.0. That’s the middle point, which will be, like, 27% year over year increase despite over this 700,000,000 revenue impact. So it’s really because our core business is stressed. What we’re seeing is continue the momentum with our CPU server business. And on the client and the business side, it has been performing really well.

The sell through is really strong, and we have a much higher, richer product mix versus traditionally because of the product portfolio. So the other thing I’m actually pleased is our gaming business. Right? We went through this really deep correction. Now the inventory normalized, and we actually seeing customers on the gaming console side.

They actually start to build for the holiday season in q q two and q three. So client on the gaming business performed really well. We actually in q two, we do expect client on the gaming business to up high high teens sequentially, which of course offset the high teens decline on the data center side due to the impact. Overall, when you think about the first half for AMD, we actually expect revenue to be up 30% despite of this export control and the tariff uncertainties year over year. And, of course, you know, we’re driving earnings expansion much faster than revenue growth.

What’s most exciting, it’s actually second half, is we’re launching MI three fifty. We are on track with our execution for MI 400 generation launch next year. Overall, not only we’re adding new customers, but existing customers, we’re covering more application, more models from both inferencing side. You will also see or expect us to run more training models with our customers. So overall, very exciting.

We’re confident about our CPU platforms. We do believe the product portfolio innovation and the technology strengths will help us continue to gain share. So overall, you know, I would say 2024 was a year to build the foundation, and the 2025 really is an inflection for us to drive a top line revenue growth, only for 2025, but beyond. Right? And again, that earnings expansion.

So it is exciting time for AMD.

Vivek Arya, Analyst, BFA: Excellent. No. That that’s a great great introduction. And you took away half of my question, Jean, so I have to find

Jean Hu, CFO, AMD: Okay. Now you ask for more interest.

Vivek Arya, Analyst, BFA: Yes. No. Thank you for doing that. So let’s start with the data center business. Help us understand why you thought first half would be flattish?

And what gives you the confidence in the second half upside and with the launch of the MI350? Do you think it is just a product transition issue? Was there something lacking? Like what changes in the product? And how is just your confidence around getting new customers or expanding your potential with existing customers with the MI series?

Jean Hu, CFO, AMD: Yes. I’ll start at high level, then Matt can add is when you think about it is since we launched MI 300 in December 2023, the annual cadence really accelerate our road map. And when you think about each generation of our product, are making significant improvement. We have the competitive advantage on the inferencing side because the memory capacity, bandwidth, we are continuing to drive that advantage with each generation. So MI 300 is really the first one.

MI three twenty five, which is very competitive, but MI three fifty is where we see the inference performance jump by 35 times. And, of course, we can also support the training models. So when you look at that progression of the product road map, typically, you go through a transition. The significant ramp in 2024 with MI 300 over 5,000,000,000. And then, of course, in the second half of this year, that’s where we launch MI three fifty, which we see tremendous customer attractions with the not only adding new customers and existing customers.

So from overall, when you have a business or market growing so fast and you’re pushing out a different generation of product, you do go through that natural transition.

Matt Ramsay, Head of Investor Relations, AMD: Yeah Vivek, I think the only thing I would Gene said it well, but the things that I would add are we were really excited as a company to be able to pull in the MI three fifty, three 50 five by about a quarter. And given the capabilities jump, both on a a scale out networking perspective, new data types for FP four and FP six, new sort of memory configs and bandwidth, compute capabilities of the GPUs themselves. You pull a product in in the roadmap and it does impact some of the purchases of the prior gen as you lead up there and have a transition. As Gene mentioned in her opening comments, Q2 was planned to be a bit more of a China heavy quarter for us anyway as the Western customers went through that transition. And then we got some additional deep sea demand pull in China.

Due to the export restrictions, we’ve had to exclude that revenue now. So it does make the shape of the year look different than the back half look like a really steep ramp. But essentially, we were executing to what we had laid out to this community on our call in February, maybe a tiny bit better than that. And then obviously we had to react to the export restrictions. But what we the confidence levels and now that we’re getting closer and closer to launching the products, we’ve sampled MI-three 55 systems to a number of customers and gotten their feedback on it.

I think we feel pretty good about where we are.

Vivek Arya, Analyst, BFA: Got it. What is the most frequent workloads that AMD product is used for, right? Because there is always a question that you have the incumbent, Right? They have all their software and developers and and whatnot. So there is a natural case for them in a lot of public clouds.

And then you have the custom chips on the other side. Right? And there is a case to be made for them in a lot of internal workloads. What is AMD’s, you know, workload where you say, you know, this is where we lead today, or this is where we hope to lead going forward?

Jean Hu, CFO, AMD: Yeah. I will say very, very first thing is inferencing. If you look at the AMD from MI 3 Hundred, we do have the advantage on the inferencing side. And if you look at the the first two years of ramp, are powering some of the most complicated models like a chat GPT four and Microsoft Copilot on the Lama side, the meta side, the recommendation engine, and the different things. So priority wise, for 2024, we have been really focusing on those very complex model to support the customer into production and cover more and more models and applications.

That is really for us from inferencing side. It’s the key advantage. And, of course, we are increasingly cover the training side, different things. I think when you look at the ASIC versus merchant GPU, our view has always been, you know, different models need a different computer engine. You definitely can see if the model is very much fixed and not changing, ACP probably is the most cost effective solution.

But when you look at the Gen AI market, the model innovation, just the pace is incredible. Everything continue to change. So we do think general purpose GPU will continue to be the majority of the market. That’s basically, you know, how we think about it, and what we’re improving each generation is not only keep the competitive advantage on the inferencing side, but like Matt said, we’re adding more networking capability. We acquired ZT, which will add a system solution and the support at the right level build up clusters in 2026.

Matt Ramsay, Head of Investor Relations, AMD: I see. Yeah. Vivek, the only thing I would add to that is, I mean, we all have to think about that this is a transformative computer science that’s, what, 30 months old. So that we see and DeepSeek was one example, and it got a lot of attention because it was in China and some some claims that they made on cost. But what we see is a sort of a proliferation of folks that are like DeepSeek as the installed base of GPUs, some from our competitors, some from us, get larger and larger and larger.

You’re going to see more folks doing software innovation on the install base. And and it is certainly where algorithms that settle down, it certainly makes tons of sense to do an ASIC. And we continue to think ASICs will be an important part of the market and we’ve actually done some in certain instances for for customers. But in a time when the algorithms are moving so quickly, another way to generate leading TCO for your customer is to take advantage of the industry software innovations over the whole depreciable life of the product. And I think that that we and our our large GPU competitor probably agree on that philosophically around the programmable nature of of of these systems and and how early we are in in the software innovation of the models.

Jean Hu, CFO, AMD: Yeah. And I will say we also made a tremendous progress on software side. You should see or expect to see more of our solutions with the tier two CSPs because we have been prioritized our top customers. But in 2025, our major focus is to broadening the customer engagement. So enterprise customers can actually go to different cloud and tier two CSP, get to the AMD, MI three hundred, three twenty five, and three fifty to run their application models.

So you will see more and more of that.

Vivek Arya, Analyst, BFA: Got it. And just one last one on on kind of a near to medium term. Just because of the cycle time of getting a lot of these inputs done, how would you characterize the visibility, Jean? Do you think a lot of the decisions about the second half have already been made so there shouldn’t be like what are the upside drivers or or downside risks as you look towards the second half for for MI?

Jean Hu, CFO, AMD: Yeah. Thanks for the question. I think when we engage our customers, it’s always multigenerational. You’re absolutely right. The lead time the cycle time for complicated GPU solutions are really long.

So, typically, you really need to plan ahead with your supply chain and the capacity continue to be tied with the co ops and the HPM memory. You absolutely have to get your allocation for the year. From customer engagement side, it’s the same because not only you need it we sample the hardware, but you also need to make sure your software really work

Matt Ramsay, Head of Investor Relations, AMD: Right.

Jean Hu, CFO, AMD: And to get a hardware to perform into level customers need, the TCO they will need. So we have been working with our customers for a long time. So it’s not, you know, just recently. We do feel quite good about the customer feedback and the customer engagement and the customer orders for the second half. It is in the end we we think the market opportunity actually is tremendous.

It’s really about how we can help a customer ramp on the software side to support their workload. Got it. And how would you,

Vivek Arya, Analyst, BFA: you know, gauge AMD’s progress so far, Jean, when it comes to things like software, right, the majority of the ROCCM stack, and then also networking because some of your peers have, you know, a lot of their internal solutions when it comes to scale up, right, proprietary or Ethernet based or, you know, they have Ethernet switches and so forth. So how would you kind of assess where AMD is from that perspective?

Jean Hu, CFO, AMD: Matt, you want to Software is your area of focus.

Matt Ramsay, Head of Investor Relations, AMD: Yeah. So Vivek, I think there’s a couple of things. And you mentioned and you’ve seen this as AI has proliferated, our need to go to system level solutions. Right? And that’s inclusive of CPU, GPU, networking, software, system level design, cooling, power supplies.

There’s a lot to it. Right? We needed to continue to invest more in the ROCCM software stack, and I think we’ve done that. There was a focus in 2024 on the largest customers, right? And now you’ve seen us start to broaden out the teams doing biweekly ROCCM releases.

The goal is over time to be the software stack of choice for open source deployment of AI. And that’s not going to happen in a week or a month. But you saw with what AMD did from 2016 to 2019 in the server space, right, where it was a focus on the largest of customers first and then a broadening out of the strategy as we gain scale. And I think you’ll see that be something that we continue to focus on the software side with the ROCCM stack. But the team, the goal is really how quick how many models can you support that are performant on day zero?

The ones that aren’t performing on day zero, how much can you shrink the time and the friction to go from a competitive solution to an AMD solution and move the get that model performant in not months, not weeks, but days. And I think for a lot of things we’re making really good progress on that. And we’ve also spent a little bit more time and resource maybe in the long tail, not yet of full support from the long tail, but on educating some of the folks in that community that might be influential in this in the news flow as to what our progress is, how they should be measuring our progress in software. Have them know that what the strategy is versus them just maybe picking up a GPU and try to run stuff without any engagement or support from AMD and then that experience being a little different than they expected. So I think we’ve made a lot of progress, but there’s a lot of work to go.

Mean, we’ve done things like silo, AI, where we brought in an hire that has some stuff, vertical specific software for certain industries, and I think you’ll hear more about that. It’s a bit of a weird time to have this conversation with our launch event next Thursday, so anyway, tuned. Okay.

Vivek Arya, Analyst, BFA: As you move to Rack Scale next year, what is the content lift that AMD can get? Or is it that a lot of the incremental content comes from partners and others? Just is there a simple way, Gene, to look at what kind of content lift you can get as you migrate from more, you know, chips and boards towards more max scale systems?

Jean Hu, CFO, AMD: Yeah. I I think AMD’s approach has always been embracing the ecosystem. And when you think about it, these we do have our GPUs and also on the networking side, we acquired a company called Pansendo. They have the program both GPUs, which is great asset for us from the networking side. And then with the ZT acquisition, we have 1,200 very talented engineerings.

They are not they are like power management, like a thermal system solution engineers. They will help us to design, reference design, the cluster, and the system level design. But we work with our partners. Right? On the networking side, we work with Arista, Cisco, Broadcom, and also, you know, we work with other suppliers.

So for us, it is about to provide our customers the system solution, but, you know, we get benefited by selling GPUs, CPUs, and the DPUs. But our customers also get benefited by selling their networking gears. So I would say, you know, each generation, the content is increasing, especially for us. If you look at the MI three fifty, we’re still just selling GPUs. But when we get to MI 400, not only GPUs and the DPUs and also the high note over CPUs.

So our content will increase very, very significantly. And at a cluster level, if we can support really very, very large clusters, that help us tremendously. But our partners will get benefit by selling Ethernet switches or other names.

Vivek Arya, Analyst, BFA: Yeah. Significant as in thirty, forty, 50 percent?

Jean Hu, CFO, AMD: No. We we have not quantified any of that yet.

Matt Ramsay, Head of Investor Relations, AMD: Yeah. Vivek, the only other thing I would add is the the ZT deal that we did both ends of it. Right? So we brought the ZT design team in house and then recently announced the planned divestiture of the manufacturing co. That whole ZT design team under consultant contracts was working alongside of the AMD design teams on the MI 400 series the whole time sort of the deal pending and now that they’re part of the company.

A unique focus for them, having been part of a manufacturing company, is designed for manufacturability. When they were part of ZT as an integrated company, if they didn’t design systems that could then be manufactured and sold, had no revenue. So we were really I think pleased with some expertise that they brought into the company, not just on system level design but system level design with an emphasis on manufacturability and time to market. So I think you’ll hear the team talk a bit more about that next week.

Vivek Arya, Analyst, BFA: Got it. One other question, we’ll come back to the data center side, but one question that has come up, Gene, as you well know, the client side is just given all the trade and tariff issues, the risk of pull ins and so forth. And AMD has had such significant, you know, strength in your PC business. So how are you assessing the risk? I know you’ve already guided to kind of sub seasonal second half, but was that more out of conservatism or is that something that you’re truly seeing?

Jean Hu, CFO, AMD: Yeah. Thanks for the question. We absolutely have seen our client business performing extremely well, but we have not seen any meaningful pull ins and the pull forward from our customers. When we really look at our client performance, for instance, in q one, client, actually, PC business is up 68%, but the 43% is because the ASP increase. And that is not like to like ASP.

It’s more AMD has been introducing the latest generation product. So the mix is at the high end of the stack

Vivek Arya, Analyst, BFA: Right.

Jean Hu, CFO, AMD: You know, we play. That has been the key driver of our q one performance. Frankly, you know, the the the client discussion has been ongoing for several quarters because the performance has been really good. If I look at the trend, what happened in q one actually was quite consistent with the prior quarters. It is the ASP increase.

It is the richer product mix. So q two, we actually continue to see the momentum, especially right now. Are in the middle of a quarter. We have not seen a slowdown of the sell throughs. So it’s very good in q two.

We do think sequentially it will be better than seasonality. For the second half, you know, it just the micro uncertainties are just lot. So we cannot predict what’s going to happen. Right? It’s every day, there are some news.

From that perspective, we’re trying to be really, you know, mindful of the macro environment to make sure we are conservative thinking about the second half. Didn’t mention it’s a sub seasonal, but it’s really driven by the uncertainties in the macro environment and the tariffs. Right. Yeah.

Matt Ramsay, Head of Investor Relations, AMD: So, Zach, I think if the if the the client market from a unit perspective performed quote unquote normally, I think we would have a really good back half of the year in our client business. But given the uncertainties that are out there, I think it’s just prudent at this time given how strong the business was in the first half of the year to take that approach. And if we do better than that, great. But I I think for for now, the business, we have seen a few pull forwards, as Gene said, but we’ve been working really hard to manage around that. Maybe a data point that will be helpful in the first quarter, our units were actually down more than seasonal, and the sell through was more than selling across our client business.

So we’ve been trying to to manage the business as best we can to to sort of protect ourselves from from the trends that are happening, but there there’s a lot of uncertainty, and and I think being being prudent about it right now is probably the best approach.

Vivek Arya, Analyst, BFA: Right. So you wouldn’t be surprised to see some semblance of seasonality if macro doesn’t change from where we are today? Yeah. We’ll be happy

Matt Ramsay, Head of Investor Relations, AMD: to see that. Buy your large grains of salt to be back.

Vivek Arya, Analyst, BFA: Okay. Understood. One other thing that also came up in your rivals call on the x86 CPU side, they said that some customers are going down the stack to kind of address some of the tariff issues. I know the tariff situation keeps on changing and that the mix of AI PCs has come down. Did you also see that?

Or like how do you see that field of AI PCs? Like you mentioned, ASP strength. So what is driving that richer mix than ASP strength for AMD?

Jean Hu, CFO, AMD: We have not seen that. We ask our team, sales team. We have not seen that. I I think the strength of our ASPs has been because the latest generation of product we have, not only we have the best GPUs for the gaming players. We also have best CPU and the APU on the AI capability side.

So overall, if you look at these, we’re dressing the high end of the each stack versus in the past, EMD tend to stay at the lower side, consumer side. But more importantly, on the commercial PC side Yeah. We were very, very much underrepresented. We are still underrepresented. But with the Dell engagement, that really help us with more OEMs and more platforms in the market, and we’re focusing on enterprise go to market.

So with enterprise customer adoption, that also helps. Right? The commercial PC side, it tends to have a higher ASP. So I think our strategy in PC market is first is to lead with the technology and the product portfolio. That has been the key driver Lisa and the team is focusing on.

That really help us to, you know, not from market share side, we’re still a small player. But for us, we really want to be profitable growth, not only just growing revenue, but to get profitability there.

Matt Ramsay, Head of Investor Relations, AMD: Yeah. See. The the other piece, Vivek, is that in the enthusiast desktop market, both for developers and for gamers, I think for this audience go find whatever Amazon or whatever e tailer site you’d like to go find and figure out where AMD SKUs are in the top 10 on those and I think you’ll be pleased with the results. Over the last six, seven quarters, it’s been a significant share shift in the highest end of the desktop market and the sell through has been very strong relative to the sell in as well, that’s a new ASP rich part of the TAM that AMD had not traditionally won that much business in and the market share has sort of flipped on its head in that piece and that we feel pretty strongly that we can sustain that if we continue to innovate on those

Vivek Arya, Analyst, BFA: Got it. And the last minute or so, I just wanted to quickly touch on gross margins since we have our CFO here. So gross margins, the one pushback we hear about is that, well, AMD’s growth will be driven by a lot of these GPUs. And so far, they have been kind of below corporate average. So as that mix shifts more to these GPUs and then within that, the mix shifts more to rack scale systems, right?

That so how do you look at the trajectory of gross margin from here, Jean? What what are the upside and downside risks?

Jean Hu, CFO, AMD: Yeah. I think AMD’s business, there are always a a few puts and takes because the mix actually really drives the gross margin. Overall, when you think about the second half, it is true we’ll see data center to be the number one revenue driver for the second half. And of course, the GPU is the important element of that, which is dilutive to corporate gross margin. But we do have our server business enterprise, both on the server side and the commercial side will actually help to drive the gross margin up.

So we do think we will see modest gross margin improvement in second half. Of course, it depend on mix. Going forward into next year and beyond, I’m actually quite confident about continued gross margin expansion despite the awful data center GPU side is slightly dilutive or dilutive to gross margin. But the overall enterprise play, both on the server side and the commercial side, more importantly, we did not touch embedded business. Actually, we do see really important demand signals that the cyclical upturn is coming.

So we do think next year, the embedded business will also be much stronger versus this year. That is a really, really high gross margin business for us that will help us with the mix also.

Vivek Arya, Analyst, BFA: Right. Terrific. With that, Jean, Matt, thank you so much. Really appreciate the discussion, and thank you all.

Matt Ramsay, Head of Investor Relations, AMD: Thank you, everybody. So much.

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