Shares of Advanced Micro Devices (NASDAQ:AMD) edged lower in U.S. premarket trading on Wednesday, as the chipmaker’s robust quarterly results were overshadowed by growing concerns about lofty technology valuations.
AMD, whose stock has more than doubled in 2025, continues to cement its position as a key challenger to Nvidia (NASDAQ:NVDA) in the rapidly expanding artificial intelligence (AI) sector. The company is vying to supply the computing power behind next-generation AI models—a shift that CEO Lisa Su described as driving “unprecedented growth opportunities.”
The company has attracted major backing from partners including OpenAI, the creator of ChatGPT, and the U.S. Department of Energy. However, analysts note that while such collaborations are critical to sustaining AI’s momentum, investors are increasingly uneasy that heavy spending and aggressive dealmaking by major tech firms could inflate another market bubble.
In the September quarter, AMD’s data center division—home to its AI-focused chip operations—posted a 22% increase in revenue to $4.3 billion. Meanwhile, client and gaming revenues soared 73% year-on-year to $4 billion.
Overall, the company reported total revenue of $9.25 billion for the period, exceeding analyst expectations, according to LSEG data cited by Reuters. Net income rose to $1.96 billion, or $1.20 per share, also topping estimates.
Looking ahead, AMD forecasts revenue of $9.6 billion for the current quarter, plus or minus $300 million, signaling continued momentum. The company described this outlook as a “clear step up in our growth trajectory as our expanding compute franchise and rapidly scaling data center AI business drive significant revenue and earnings growth.”
Still, some investors zeroed in on a 14% decline in profitability within AMD’s data center segment, highlighting the cost pressures associated with scaling production to meet surging AI demand.
Analysts at Jefferies, including Blayne Curtis and Kevin Garrigan, noted that operating expenses were “a little higher” but added the increased spending was primarily directed toward research and development and was “to be expected” as AMD boosts output.
They also pointed out that further insights into the “AI opportunity” for AMD are expected at the company’s upcoming analyst day next week.