AMD Profit Margins

Gross, Operating & Net Margin Analysis for Advanced Micro Devices Inc

Margin Quality

Good

Current Profit Margins

Gross Margin

49.5%

49.5% YoY

$17.15B gross profit

Operating Margin

10.7%

10.7% YoY

$3.69B operating income

Net Profit Margin

12.5%

6.2% YoY

$4.33B net income

5-Year Margin Trends

2023Revenue: $22.68B
Gross0.0%
Operating0.0%
Net3.8%
FYRevenue: $22.68B
Gross46.1%
Operating1.8%
Net3.8%
FYRevenue: $25.79B
Gross49.4%
Operating7.4%
Net6.4%
2024Revenue: $25.79B
Gross0.0%
Operating0.0%
Net6.4%
FYRevenue: $34.64B
Gross49.5%
Operating10.7%
Net12.5%

What Margins Indicate About AMD

Business Quality

Moderate gross margins indicate Advanced Micro Devices Inc operates in a competitive market with balanced pricing dynamics.

Operational Efficiency

Expanding operating margins show Advanced Micro Devices Inc is improving operational leverage and cost management.

Profitability

Net margins in the 5-15% range are solid and typical for many profitable businesses.

Investment Implications

Expanding margins across the board suggest improving business fundamentals, which often supports stock price appreciation.

Understanding Profit Margins

Gross Margin

(Revenue - Cost of Goods Sold) / Revenue. Measures pricing power and production efficiency before operating expenses.

Operating Margin

Operating Income / Revenue. Shows profitability from core operations after all operating expenses but before interest and taxes.

Net Profit Margin

Net Income / Revenue. The bottom line - shows how much profit the company keeps from each dollar of revenue after all expenses.

Analyze AMD Profitability

Get complete financial analysis with profitability trends, ROE, ROIC, and more

Frequently Asked Questions

What is AMD's profit margin?

AMD (Advanced Micro Devices Inc) has a net profit margin of 12.5%, meaning the company keeps $0.12514795461762754 in profit for every dollar of revenue. This represents an improvement from the previous year's net margin of 6.4%.

What is AMD's gross margin?

AMD's gross margin is 49.5%. Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold. A moderate gross margin like this reflects the competitive dynamics of the Information Technology.

What is AMD's operating margin?

AMD has an operating margin of 10.7%. Operating margin shows profitability after operating expenses but before interest and taxes. The 10.7% year-over-year improvement suggests better operational efficiency.

Are AMD's profit margins good?

AMD's margins are considered good. When evaluating margins, it's important to compare against Semiconductors & Semiconductor Equipment peers, as different sectors have structurally different margin profiles.

How do profit margins affect AMD stock?

Profit margins are a key indicator of AMD's business quality and competitive position. The current margins should be evaluated alongside growth rates and return on capital to assess overall business quality. Expanding margins often lead to stock price appreciation, while contracting margins can signal competitive pressures.

What drives AMD's profit margins?

AMD's profit margins are influenced by several factors: pricing power vs competitors, operational efficiency, scale advantages, input costs (materials, labor), Semiconductors & Semiconductor Equipment-specific dynamics, and management execution. The significant expansion in gross margin suggests changes in these underlying drivers.

Disclaimer: Margin analysis is based on reported financial statements and should be compared to industry peers for context. Different sectors have structurally different margin profiles. This information is for educational purposes only and should not be considered financial advice.

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