Advanced Micro Devices (NASDAQ:AMD) is gaining momentum in 2025, with one segment showing particularly strong promise: the client business. As AMD battles for dominance in the PC and AI processor space, the AMD client segment is emerging as a major growth engine, supported by strong Ryzen CPU sales, AI innovations, and rising commercial adoption.

The key question now: Can the AMD client segment continue to drive long-term growth?

Client Segment Revenues Surge 67.7% Year Over Year

In the first quarter of 2025, AMD’s client segment revenue soared 67.7% year over year to $2.29 billion, making up 30.8% of total revenue. This surge was driven by robust demand for high-performance Ryzen CPUs and AI-powered processors across gaming and commercial PC markets.

Flagship launches like the Ryzen 9 9950X3D and new AI-enabled chipsets such as the Ryzen AI Max Plus and Ryzen AI 300 Series set new benchmarks in performance and efficiency. These premium products also improved AMD’s average selling prices, which further boosted revenue.

New Products and Commercial Partnerships Fuel Growth

AMD isn’t resting on past successes. The company’s Ryzen AI Pro chips will power new Dell Pro devices in 2025, marking a deeper collaboration with Dell. At CES 2025, AMD unveiled its next-generation processors: the Ryzen AI Max, AI 300, and AI 200 Series—specifically designed for AI PCs and mobile productivity.

A key contributor to the AMD client segment strength is the growth of AMD-powered commercial systems. Sell-through of Ryzen Pro PCs jumped more than 30% year over year, and the number of AMD-based devices from OEMs like HP, Lenovo, Asus, and Dell increased by over 80%.

Competitive Landscape: Intel and Qualcomm

Despite the positive trajectory, Advance Micro Devices faces stiff competition. Intel Corporation (NASDAQ:INTC) remains the dominant player in the CPU market, with deep relationships across OEMs and system integrators. Intel’s entrenched presence in the desktop and laptop markets presents a real challenge to AMD’s expansion.

Additionally, Qualcomm (NASDAQ:QCOM) is intensifying the battle with its ARM-based Snapdragon processors, which are gaining traction in the PC market. Qualcomm’s 2025 Snapdragon G Series, including the G3 Gen 3 and G2 Gen 2, is designed for next-gen gaming and mobile computing—two key markets that AMD also targets.

As ARM architectures mature and gain industry support, AMD must continue innovating to protect and grow its client segment share.

Stock Performance, Valuation, and Analyst Estimates

AMD stock has gained 5% year to date, outperforming the broader Zacks Computer & Technology sector, which returned just 1.5%. However, the stock is trading at a premium. Its forward 12-month Price/Sales ratio stands at 6.01x, compared to the industry average of 3.69x. It currently holds a Value Score of D, signaling potential overvaluation.

Despite the client segment’s strength, near-term earnings expectations are soft. The Zacks Consensus Estimate for Q2 2025 earnings is $0.54 per share, down 16.9% over the past month and reflecting a 21.74% decline year over year.

On a brighter note, full-year 2025 earnings are expected to come in at $3.92 per share, suggesting 18.43% growth from 2024.

The Verdict: A Growth Engine in the Making?

The AMD client segment is clearly gaining traction, driven by AI innovation, gaming performance, and enterprise partnerships. While broader market competition and valuation concerns remain, AMD’s strategic investments in next-gen processors and deepening OEM ties position it well for continued success.

Long-term investors may want to watch this segment closely—it could be the key to unlocking AMD’s next phase of growth.

With consumer demand shifting toward AI-enhanced experiences and high-performance mobile computing, AMD’s client business is well-positioned to capture market share. If AMD can sustain innovation and expand commercial adoption, the client segment may not just be a bright spot—it could become the core engine of the company’s future.

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