Through the first three quarters of 2025, both AMD and Broadcom have demonstrated robust operational execution, albeit in distinct ways that reflect their differing business models. AMD has shown a clear acceleration in revenue momentum driven by expanding AI demand and the ramp-up of its new product families, while Broadcom has delivered highly consistent growth supported by a blend of semiconductor and infrastructure software income. A comparative analysis of their Q1–Q3 2025 performance shows two companies progressing strongly, though with differing risk profiles and cash-generation characteristics. Based solely on the evidence from these three quarters, both companies remain attractive but cater to different types of investors.
AMD began 2025 with a solid quarter, recording revenue of US$6.5 billion in Q1 alongside a substantial improvement in gross margin. The company highlighted that multiple business lines contributed to this early momentum, including client processors, server CPUs, gaming products, AI accelerators, embedded systems and Xilinx. Throughout the first half of the year, management emphasised its confidence in the expanding AI opportunity and the scalability of the MI300 product family. Despite this, AMD acknowledged areas needing improvement, such as the pace of client revenue growth relative to its targets, and it committed to continued investment in AI technologies to maintain competitiveness, including work on its next-generation “Zen 6” architecture.
In Q2, AMD continued its positive trajectory with revenue rising to US$8.1 billion. This growth was driven primarily by its data centre and client divisions, which more than offset pockets of weakness in gaming and embedded revenues. The company openly acknowledged a significant write-down associated with the MI308 product line, which led to a short-term impact on gross margins; however, this was addressed through cost controls and enhanced focus on operational execution. Gross margins nevertheless fell during this quarter, and AMD recorded a small amount of free cash outflow. Management once again reiterated confidence in the firm’s long-term AI strategy and the strength of forthcoming platforms such as the MI350 and MI450 families.
AMD’s third quarter, however, marked a substantial re-acceleration, with revenue surging to US$9.2 billion — the highest quarterly revenue among AMD’s three reported quarters. This quarter saw record results across data centre, client and AI products, with particular emphasis on the success of the MI350 series and the positive reception of the Ryzen AI 300 platform. A key highlight was AMD’s strong cash performance, with improved free cash flow and a notable recovery in gross margins following the one-off write-down in Q2. Management reiterated plans to scale the MI300 and MI350 products further while highlighting its progress on next-generation roadmaps for Zen, RDNA, CDNA, and XDNA. It also confirmed that spending discipline and efficiency enhancements remained priorities.
Broadcom’s progress through the same three-quarter period reflects a very different profile. In Q1, Broadcom delivered revenue of US$12 billion and announced strong expectations for the remainder of 2025. Earnings also grew during this quarter, and the company reported brisk momentum in its enterprise software division and its AI-related semiconductor business. Broadcom highlighted that generative AI continued to drive demand for its scale-out solutions and reported revenue growth of 34 per cent year-on-year for its AI division alone.
By Q2, Broadcom’s financial position strengthened further, with quarterly revenue rising to US$14.5 billion. The company highlighted stronger-than-expected results across most of its business units, with semiconductors and infrastructure software each contributing significantly. It also raised its full-year outlook as a result of continued AI growth, both in custom accelerators and networking. Importantly, the company reported increased synergy gains and noted that AI now accounted for 42 per cent of total semiconductor revenue. This quarter also saw Broadcom generate robust free cash flow, demonstrating its continued strength in cash conversion.
Broadcom’s Q3 results extended this momentum, with revenue reaching US$15.95 billion, once again surpassing earlier quarters. Revenue rose by 22 per cent year-on-year, with AI revenues accelerating and the company reiterating that demand for hyperscale deployments remained strong. Free cash flow for Q3 alone amounted to US$7.02 billion, underscoring the firm’s exceptional ability to turn revenue into cash. Additionally, Broadcom maintained its shareholder-return strategy, paying a US$0.59 dividend for the quarter. Its infrastructure software business continued to contribute significant recurring income, and management highlighted continued confidence in its AI-driven growth strategy.
Comparing the two companies using only the available quarterly data, AMD appears to be the faster-growing entity from a revenue-growth perspective, especially in Q3 where it achieved a record quarter following a strong recovery in margins and cash generation. AMD’s growth, however, comes with periods of volatility, as seen with the MI308 write-down and short-term gross-margin fluctuations. By contrast, Broadcom demonstrated steadier quarter-on-quarter progression without major disruptions and consistently generated far higher levels of free cash flow, reinforcing its position as a capital-efficient and cash-rich enterprise. Both companies are clearly benefitting from the ongoing expansion of AI workloads, but Broadcom’s large-scale infrastructure and software base provides it with a stability that AMD does not yet match.
From an investment perspective, the three-quarter performance suggests that AMD is best suited to investors seeking higher-growth exposure to AI-driven semiconductors, with the understanding that volatility is inherent in its product cycles and execution risks. Broadcom, on the other hand, offers a more defensive technology exposure with substantial recurring revenue and industry-leading cash generation, making it suitable for investors prioritising predictable returns and steady compounding. A diversified investor may find value in allocating to both companies: AMD for its accelerating growth trajectory and Broadcom for its ability to deliver sustainable long-term cash flows.
On the basis of the data contained solely within the first three quarters of 2025, I recommend maintaining positive exposure to both AMD and Broadcom, with a tilt towards Broadcom for stability and income, and AMD for growth and AI-related upside. This combination successfully captures the strengths of each company while balancing risk and opportunity in a rapidly evolving semiconductor and AI landscape.
References:
- https://ir.amd.com/financial-information/financial-results
- https://investors.broadcom.com/financial-information/quarterly-results
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