AMD Reports Strong Q2 Revenue Despite AI Chip Export Restrictions to China

Chipmaker AMD forecasts third-quarter revenue above estimates

Aug 5 (Reuters) - Advanced Micro Devices (AMD.O), opens new tab forecast third-quarter revenue above Wall Street estimates on Tuesday, betting on upbeat demand for its artificial intelligence chips from businesses rushing to expand infrastructure to dominate the latest technology. Shares of the Santa Clara, California-based company rose 2% in extended trading. AMD's shares have climbed more than 40% this year, far outpacing a nearly 12% jump in the benchmark chip index (.SOX), opens new tab, as investors bet on the company's ability to capitalize on the widespread use of AI. Demand remains robust for AMD's advanced processors that power complex AI systems for Microsoft (MSFT.O), opens new tab, Meta Platforms (META.O), opens new tab, generative AI leader OpenAI and other customers, with the company set to benefit from cloud giants bumping up their hefty spending plans for building AI infrastructure. Meta has raised the bottom end of its annual capital expenditure forecast by $2 billion, to a range of between $66 billion and $72 billion. Similarly, Microsoft forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand. The company expects revenue of about $8.7 billion for the third quarter, plus or minus $300 million, compared with analysts' average estimate of $8.30 billion, according to data compiled by LSEG. The outlook does not include any revenue from AMD's AI chip MI308's shipments to China as license applications are currently under review by the U.S. Government, the company said. The company said last month the Department of Commerce would review its license applications to export its MI308 chips to China and it plans to resume those shipments when licenses are approved, after U.S. curbs announced in April required it to obtain a license to ship advanced AI processors to China. AMD had forecast a $1.5 billion hit to revenue this year due to these curbs, with most of the impact affecting the second and third quarters. Reporting by Max A. Cherney in San Francisco and Arsheeya Bajwa in Bengaluru; Editing by Sriraj Kalluvila Our Standards: The Thomson Reuters Trust Principles., opens new tab

AMD reports weaker-than-expected earnings even as revenue tops estimates

Advanced Micro Devices reported quarter earnings on Tuesday that missed estimates. The stock slid about 5% in extended trading. Here's how the chipmaker did versus LSEG expectations for the quarter ended June: For the current quarter, AMD expects sales of $8.7 billion, plus or minus $300 million, versus expectations of earnings of $8.3 billion. AMD reported net income during its fiscal second quarter of $872 million, or 54 cents per share, increasing from $265 million, or 16 cents per share in the year-ago period. Nvidia's overall sales rose 32% in the period from $5.84 billion a year earlier. AMD is the second-biggest maker of graphics processing units (GPUs) for artificial intelligence behind Nvidia, which has the vast majority of the market. But big AI customers such as Meta and OpenAI are increasingly looking to AMD to provide an alternative to Nvidia's pricey chips, especially for inference, or when AI models are deployed to the public. During the quarter, AMD announced new AI chips called the MI400 that are expected to hit the market next year. OpenAI CEO Sam Altman committed to using AMD's newest GPUs. AMD is also grappling with chip export controls which have been placed on some of its AI chips because the U.S. government worries that powerful GPUs could be used by adversaries to surpass American capabilities or be used for military purposes. The MI308 was previously barred for export to China in April, which the company said cost it $800 million in the June quarter. However, the company said in July that it expected shipments to resume after the Trump administration signaled that it would approve waivers. AMD said its outlook doesn't include any revenue from its China-focused AI chip called the MI308 and its license applications are currently being reviewed by the Department of Commerce. AMD's adjusted gross margin during the quarter was 43%. The company said it would have been 54% if not for export control costs. AMD's main business, aside from GPUs, is making central processors, called CPUs, which compete with Intel to power more traditional servers. Both are reported in the company's data center segment, which had $3.2 billion in revenue, up 14% on an annual basis. The other major segment for AMD is called Client and Gaming, which includes the company's CPUs for laptops and desktops, and its GPUs for 3D gaming. That was up 69% on an annual basis, partially driven by strong demand for the company's latest desktop CPUs, which it calls AMD Ryzen Zen 5. Gaming revenue by itself was $1.1 billion, up 73% on an annual basis due to increased demand for custom chips for game consoles and gaming GPUs, AMD said.

AMD stock slumps 5% on earnings miss, China AI chip concerns

The Santa Clara, California-based company reported adjusted earnings of 48 cents per share, falling short of the 49 cents per share expected by analysts polled by LSEG. CEO Lisa Su singled out the hit from U.S. controls on artificial intelligence chips in a call with analysts. "AI business revenue declined year over year as U.S. export restrictions effectively eliminated MI308 sales to China, and we began transitioning to our next generation," Su said. For the current quarter, AMD forecasted $8.7 billion in revenue, plus or minus $300 million, versus $8.3 billion expected by analysts. The company said its guidance does not account for revenue from its MI308 AI chip designed for the China market to work around chip restrictions. During an interview with CNBC's "Squawk on the Street" on Wednesday, Su said the company has been working closely with the Trump administration on license requirements necessary to ship its chips to China, but took a "prudent" approach to its guide. "From our standpoint, we think we have an extremely strong portfolio," she said. "Tens of billions of dollars is the opportunity in a market that's going to be, let's call it 500 billion plus over the next few years."

AMD takes $800 million hit tied to U.S. export restrictions

Designing a world-class AI chip? Hard. Getting it out of the country? Harder. AMD posted solid numbers this quarter -- revenue climbed 32% to $7.69 billion, driven by strong growth in client and gaming chips. But that momentum collided head-on with a new kind of obstacle: the regulatory kind. The company reported an $800 million charge tied to a halted shipment of AI chips to China; the company's MI308 accelerator -- designed with export compliance in mind -- was caught in the dragnet of tightened U.S. export restrictions, forcing AMD to write down inventory, cancel purchases, and cut China out of its revenue forecast. Gross margin sank to 43%, down from the 54% AMD said it could have delivered if the chips had shipped as planned. The company still beat on revenue and issued better-than-expected guidance for the third quarter. But investors were wary. Shares slid in after-hours and premarket trading -- and were down almost 8% as of mid-morning Wednesday, as Wall Street digested what could be a deeper message: In the AI arms race, licensing has become the new latency. On the post-earnings call, CEO Lisa Su told investors that AMD's license application for MI308 exports is in progress, but approvals could take "a few quarters." In the meantime, the company is leaning heavily on its MI350 chip, which entered volume production earlier this year and is now the center of its AI strategy. Third-quarter guidance came in above consensus at $8.7 billion, reflecting strength across data center and client segments -- but there won't be any help from China. AMD now estimates a $1.5-$1.8 billion revenue hit for 2025 tied to the restrictions, concentrated in the second and third quarters. That's especially risky given the state of the current licensing regime. The Commerce Department is working through what officials have described as the worst backlog in decades. Meanwhile, Chinese tech firms are reportedly using third-party logistics hubs in Southeast Asia to obtain restricted chips. In July, the Trump administration signaled a soft reversal by announcing it would begin reviewing license applications for compliant AI chips. That includes AMD's MI308 and Nvidia's H20. Commerce Secretary Lutnick framed the decision as a way to keep China dependent on U.S. technology, rather than accelerate China's domestic chip push. Tech companies cheered. But the timeline remains murky, and there's political pressure to impose broader restrictions. Trade negotiations between the U.S. and China are unfolding amid this tech tug-of-war. In late July, senior U.S. and Chinese officials held trade talks, and semiconductors featured prominently. If the countries reach a broader deal, chip licensing decisions could become recurring concessions tied to broader trade negotiation milestones. But that also raises risks: blurring the line between security policy and economic diplomacy, setting a precedent where strategic guardrails are negotiable rather than fixed. For now, AMD is pressing forward. Its stock is still up over 30% year to date. Its MI350 chip is positioned for inference-heavy AI workloads, and early demand appears strong. In 2026, AMD plans to launch its MI400 accelerator and a Helios rack-scale AI platform aimed at hyperscale customers. But if the gates to China remain license-locked, AMD's total addressable market remains artificially constrained -- regardless of product quality or price. The second-quarter results make one thing clear: AMD is doing what it can. The chips are ready. The buyers are waiting. But the next move belongs to Washington. As AI hype races on, the real decider may now sit inside trade paperwork, not lab specs. AMD's latest quarter lights that path -- and warns of a world where microchips are as guided by Washington regulations as they are by Moore's Law.

AMD hits record Q2 revenue despite AI chip curb to China

US export restrictions of advanced tech to China came as the country loosened them on Saudi Arabia. US semiconductor giant Advanced Micro Devices (AMD) reported a higher than expected Q2 revenue at a record $7.7bn, despite losing out $800m from US export restrictions on its AI chips to China. Earlier this year, AMD, along with competing chipmaking giants including Nvidia and Intel were hit with US license controls to export AI chips to China. In particular, these restrictions applied to AMD's Instinct MI308 data centre GPU chips. According to the company, its license to ship these AI chips to China is still under review by the US government. Yet, AMD has a positive outlook for Q3, expecting the upcoming quarter's revenue at around $8.7bn, or roughly a 28pc year-on-year growth. This is despite not including any expected revenue from the sale of MI308 to China if the US green lights the sale. Although, the US removed restrictions on advanced tech exports to the Kingdom of Saudi Arabia over the past quarter, just as it tightened them over China. The new opportunity quickly resulted in both AMD and Nvidia announcing plans to ship thousands of their AI chips to the region via a deal with Humain, a subsidiary of the Kingdom's Public Investment Fund. AMD's deal with Humain will advance AI infrastructure in the region through shipments of 500MW of AI compute capacity over the next five years, the company said. "We delivered strong revenue growth in the second quarter led by record server and PC processor sales," said Dr Lisa Su, AMD's chairperson and CEO. "We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year". Q2 financials showed $3.2bn in revenue from data centres, driven by a strong demand for the company's EPYC processors which more than offset impacts from the export restrictions to China, the company said. Client revenue hit a peak at $2.5bn and gaming revenue crossed $1bn, up 73pc year-on-year. But embedded segment was down 4pc as demand in end markets remained "mixed", the company said. "We achieved 32pc year-over-year revenue growth and generated record free cash flow this quarter, reflecting our disciplined execution," said Jean Hu, AMD's executive vice president, chief financial officer and treasurer. "Our strategic investments across hardware, software and systems position us well to support robust future growth and drive long-term shareholder value." Over the past quarter, AMD announced that it is divesting from ZT Systems' manufacturing business, to US-based company Sanmina for $3bn. The company purchased ZT last year for $4.9bn and is keeping its design and customer enablement teams. Don't miss out on the knowledge you need to succeed. Sign up for the Daily Brief, Silicon Republic's digest of need-to-know sci-tech news.

Chipmaker AMD's Revenue, Outlook Top Expectations

A former Senior Publishing Editor on the Dow Jones Newswires team at The Wall Street Journal, Aaron earned a Bachelor's degree in Economics from the University of Michigan and a Master's in Journalism from Columbia University. Advanced Micro Devices (AMD) reported second-quarter revenue and issued current-quarter guidance above analysts' projections Tuesday, but shares slipped in after-hours trading. The Santa Clara, Calif.-based firm posted revenue that jumped 32% year-over-year to a record $7.67 billion, well above the $7.43 billion consensus estimate of analysts polled by Visible Alpha. Adjusted earnings per share of $0.48 matched expectations. Data Center unit revenue climbed 14% to $3.2 billion, slightly below expectations of $3.32 billion. Client revenue soared 67% to a record $2.5 billion and Gaming revenue surged 73% to $1.1 billion, with the former matching and the latter well above estimates. Embedded segment revenue fell 4% to $824 million, a tick below projections. "We delivered strong revenue growth in the second quarter led by record server and PC processor sales," CEO Lisa Su said. "We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year." Gross margin was 43% but AMD said it would have been 54% had it not been "impacted by the U.S. Government's export control on our AMD Instinct MI308 data center GPU products," which amounted to a roughly $800 million hit. AMD had warned in May that it would take charges from tighter restrictions on chip exports to China, though it said last month that it planned to restart exports of its MI308 chips once it received final approval from U.S. authorities. For the current quarter, AMD sees revenue between $8.4 billion and $9.0 billion, above Visible Alpha consensus of $8.28 billion. The outlook does not include any revenue from MI308 shipments to China. Shares initially rose in late trading following the report before reversing course, and recently were down about 3%. They ended Tuesday's regular session at $174.31, up nearly 45% this year.

Why AMD Stock Is Tumbling Despite Better-Than-Expected Results

Analysts at Bank of America and Wedbush see potential upside from chip sales to China in the second half, assuming tensions between the U.S. and China don't flare up amid trade negotiations. Better-than-expected sales and guidance weren't enough to lift Advanced Micro Devices (AMD) stock over the high bar set by its run-up in recent months. AMD on Tuesday reported second-quarter sales that topped estimates, and offered Wall Street a rosier-than-expected outlook for the current quarter. Still, shares of the Nvidia competitor were down nearly 7% in recent trading. Above-consensus revenue was driven by strength in AMD's gaming segment, while earnings, margins, and data center sales were negatively impacted by an $800 million charge related to restrictions on the sale of AI chips to China. The company projected growth at all of its units in the third quarter, and forecast double-digit revenue growth as it ramps sales of its MI355X next-gen AI chip. Most analysts attributed the market's reaction on Wednesday to high expectations and a lofty valuation. "We believe guidance for the AI chip business was in line with Buyside expectations (based on our investor discussions), which is why the stock traded lower," according to Citigroup analysts. Bank of America analysts predicted Wall Street was reacting negatively to "likely ignorable earnings noise" and that the stock wasn't helped by its approximately 80% run-up in the three months leading up to Tuesday's results. One big unknown still hanging over AMD is how much revenue the company will generate when it resumes sales of its MI308 chip to China. (The MI308 was designed expressly for Chinese customers to satisfy Biden-era restrictions.) AMD and Nvidia last month said the Commerce Department had agreed to restart reviewing their export license applications after abruptly halting them earlier in the year. Nonetheless, AMD excluded MI308 sales from its guidance on Tuesday. "There are no China GPU licenses yet, which didn't hurt the outlook but possibly is a letdown for those modeling a $500mn quarterly China contribution in Q3/Q4," wrote Bank of America analysts in a note on Wednesday. But BofA saw reason for optimism in the outlook. "AMD now expects ~$1.7bn in Q3 GPU sales even without ~$800mn of lost China revenue, suggesting overall ~$500mn higher outlook excluding China vs. $2.0bn pre-ban consensus." Wedbush analysts echoed that bullish view. "The Q3 outlook was better than expected on substantial Q/Q DC GPU growth expectations, even without assuming any MI308 export licenses are granted," they wrote. "In turn, we believe this guide sets up AMD to exceed our prior outlook for the out quarters." Analysts at Wedbush raised their AMD stock price target to $190 from $170 on Wednesday. The firm maintained its "outperform" rating on the stock. Citigroup lifted its price target to $180 from $165 but stood by its "neutral" rating, citing elevated expectations. Seven of the 11 analysts tracked by Visible Alpha with current AMD ratings and price targets rate the stock a "buy," with the remainder assigning it a neutral rating. The average price target of $183 implied about 5% upside from Tuesday's closing price. AMD shares were trading at about $161 midday Wednesday.

AMD stock tumbles after flat Q2 profit miss as revenue beat rings hollow -- but explosive AI momentum fuels blockbuster Q3 forecast

AMD Q2 2025 earnings showed a mixed performance -- while profits stayed flat, revenue beat expectations thanks to booming AI chip demand. AMD reported $7.7 billion in revenue and projected a strong Q3 forecast of $8.7 billion, driven by growing sales of its MI300 and upcoming MI400 AI accelerators. Despite this, AMD stock dipped over 3% due to export concerns and high valuation pressure. Uncertainty around U.S. restrictions on AI chip sales to China remains a hurdle. Still, AMD is positioning itself as a strong player in the AI space.

AMD's restricted access to China's AI chip market may heavily dent revenue despite a strong Q3 forecast; here's why

Advanced Micro Devices (AMD) forecast third-quarter revenue above Wall Street estimates on Tuesday (August 5, 2025) but warned that its access to the China market remains uncertain due to the pending review of its license applications to export its MI308 chips to the East Asian country. AMD, the second-largest maker of AI accelerator chips, is betting on upbeat demand for its artificial intelligence chips from businesses rushing to expand infrastructure to dominate the latest technology. Shares of the Santa Clara, California-based company rose 2% in extended trading. The company expects revenue of about $8.7 billion for the third quarter, plus or minus $300 million, compared with analysts' average estimate of $8.30 billion, according to data compiled by LSEG. The outlook does not include any revenue from AMD's AI chip MI308's shipments to China, as license applications are currently under review by the US government, the company said. The company said last month the Department of Commerce would review its license applications to export its MI308 chips to China, and it plans to resume those shipments when licenses are approved, after U.S. curbs announced in April required it to obtain a license to ship advanced AI processors to China. AMD had forecast a $1.5 billion hit to revenue this year due to these curbs, with most of the impact affecting the second and third quarters. AMD's shares have climbed more than 40% this year, far outpacing a nearly 12% jump in the benchmark chip index, as investors bet on the company's ability to capitalize on the widespread use of AI. Demand remains robust for AMD's advanced processors that power complex AI systems for Microsoft, Meta Platforms, generative AI leader OpenAI, and other customers, with the company set to benefit from cloud giants bumping up their hefty spending plans for building AI infrastructure. Meta has raised the bottom end of its annual capital expenditure forecast by $2 billion, to a range of between $66 billion and $72 billion. Similarly, Microsoft forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand.

AMD Tops Revenue, Misses EPS, Eyes AI-Driven Growth - Advanced Micro Devices (NASDAQ:AMD)

Advanced Micro Devices Inc AMD reported financial results for the second quarter after the market close on Tuesday. Here's a look at the key details from the chipmaker's report. Q2 Earnings: AMD reported second-quarter revenue of $7.69 billion, beating analyst estimates of $7.41 billion, according to Benzinga Pro. The company reported second-quarter adjusted earnings of 48 cents per share, missing estimates of 49 cents per share. Total revenue was up 32% year-over-year. Here's a breakdown of revenue by segment. Data Center: $3.2 billion, up 14% year-over-year Client and Gaming: $3.6 billion, up 69% year-over-year Embedded: $824 million, down 4% year-over-year Non-GAAP gross margin came in at 43% in the quarter. AMD said the U.S. Government's export controls on its AMD Instinct MI308 GPUs led to approximately $800 million in inventory and related charges. Excluding these charges, gross margin would have been 54%. The company reported operating income of $897 million and ended the period with approximately $4.44 billion in cash and cash equivalents. "We delivered strong revenue growth in the second quarter, led by record server and PC processor sales," said Lisa Su, chair and CEO of AMD. Trending Investment OpportunitiesAdvertisementArrivedBuy shares of homes and vacation rentals for as little as $100. Get StartedWiserAdvisorGet matched with a trusted, local financial advisor for free.Get StartedPoint.comTap into your home's equity to consolidate debt or fund a renovation.Get StartedRobinhoodMove your 401k to Robinhood and get a 3% match on deposits.Get Started "We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains." Outlook: AMD sees third-quarter revenue of approximately $8.7 billion, plus or minus $300 million. Analysts are currently forecasting revenue of approximately $8.15 billion for the third quarter, per Benzinga Pro estimates. AMD's management team will further discuss the quarter on an earnings call with investors and analysts at 5 p.m. ET. AMD Price Action: AMD shares were up approximately 45% year-to-date heading into the print. Shares were down 4.90% in after-hours, trading at $165.77 at the time of publication on Tuesday, according to Benzinga Pro. Read Next: AMD Aims To Dethrone Nvidia In AI Race -- Here's How Nvidia Is Producing 'Unprecedented Wealth' For Its Employees, Nearly 80% Are Already Millionaires Photo: courtesy of AMD. AMDAdvanced Micro Devices Inc$175.40-0.78%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum87.84Growth97.59Quality74.98Value10.84Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

AMD Stock Has A Lot 'To Be Encouraged And Excited About': Analysts Are Cautious But Bullish - Advanced Micro Devices (NASDAQ:AMD)

Advanced Micro Devices AMD analysts break down the Q2 financial results and highlight what could happen in the second half of the fiscal year. The AMD Analysts: Goldman Sachs analyst James Schneider maintained a Neutral rating on AMD and raised the price target from $140 to $150. KeyBanc analyst John Vinh maintained a Sector Weight rating with no price target. Wedbush analyst Matt Bryson reiterated an Outperform rating and raised the price target from $170 to $190. Benchmark analyst Cody Acree reiterated a Buy rating and raised the price target from $170 to $210. Read Also: AMD Stock Is Sliding Wednesday: What's Going On? Goldman Sachs on AMD: The company showed Datacenter GPU momentum, but questions remain regarding scale and operating leverage, Schneider said in a new investor note. "We expect the stock to be range bound following a strong quarter with guidance that was above the Street, offset by high expectations and stock outperformance heading into the quarter," Schneider said. The analyst said the AMD stock price could hinge on the level of Data Center GPU revenue in 2026. "Based on our latest estimates, we view ~$10-11 billion as realistic - but we think investor expectations are well ahead of this level." Schneider remains Neutral on AMD with questions on the company's market share in the PC and enterprise server segments. KeyBanc on AMD: Strong second quarter results and a path to ramp up MI355 were highlights from the company's earnings for Vinh. "We're encouraged by these results and the strong ramp of MI355," Vinh said. The analyst said AMD is seeing strong high-end desktop demand, gaining market share in premium segments and seeing growing commercial momentum. "We are firm believers in AMD's revitalized product road map strategy, and product traction is compelling." The analyst said that expectations for AMD gaining market share could be too high and provides "substantial risk" to the share price, based on a valuation level that is well above that of its peers. Wedbush on AMD: Second quarter results were good, but AMD now has lofty expectations from the company and investors, Bryson said in a new investor note. "The Q3 outlook was better than expected on substantial Q/Q DC GPU growth expectations, even without assuming any MI308 export licenses are granted," Bryson said. The analyst stated that the guidance positions AMD to exceed prior analyst estimates in the coming quarters. China remains a wild card, with guidance not including future revenue for the country. While China could provide more upside in the future, the analyst said strength in client and server compute markets can help offset weaker GPU results. "Our view is rather that AMD's increased guide should be viewed as a positive outcome, particularly given the likelihood sales to China do eventually resume." Benchmark on AMD: Strong data center and client market share gains highlight the Q2 strength, Acree said in a new investor note. The analyst said the ramp of new AI GPUs bodes well for the second half of the fiscal year. "For Q3, AMD's growth is expected to be driven by a strong double-digit increase in the Data Center, particularly in MI350 ramps," Acree said. With the stock trading down after hours on Tuesday, the analyst said the move could be investors taking profits after shares had risen 26% in the last month and 56% over the last six months. Acree said stronger-than-expected results, market share gains, and the ramp of new AI GPUs should be top storylines to follow for AMD going forward. "We see a lot about AMD for investors to be encouraged and excited about." AMD Price Action: AMD stock is down 8.1% to $160.28 on Wednesday versus a 52-week trading range of $76.48 to $182.50. AMD stock is up 32.9% year-to-date in 2025. Read Next: Lisa Su Says AMD's AI Chip MI355 Taking On Nvidia's B200, GB200 Head-On As AI Customers Seek Scalable GPU Alternatives Photo: Shutterstock AMDAdvanced Micro Devices Inc$162.43-6.82%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum87.84Growth97.59Quality74.98Value10.84Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Why Advanced Micro Devices Rallied Over 24% in July | The Motley Fool

AMD had a great month, as its toned-down artificial intelligence graphics processing units (AI GPUs) were approved for sale into China, just as rival Nvidia (NVDA -1.47%) was cleared to recommence sales of its H20 chip. AMD then got an end-of-month boost when a South Korean news outlet reported that AMD was substantially increasing the price of its Instinct AI GPUs, showing off some pricing power on its most important product. Artificial intelligence stocks generally had a pretty good month in July. All of the big cloud hyperscalers increased their outlooks for capital expenditures going to AI data centers, and AMD will undoubtedly be a beneficiary of this as it seeks to become a trusted second source behind Nvidia. The positive AI sentiment also probably got a boost from the Trump administration's midmonth unveiling of its "AI Action Plan." While there were several aspects to the 30-page plan, it appears to mostly be a deregulatory document aimed at speeding up the approval and construction of AI data centers. AMD saw some of the fruits of this de-regulation on July 15, when the Commerce Department apparently told AMD that it would soon approve shipments of the company's MI308 AI chip to China. Like Nvidia's H20, the MI308 is AMD's toned-down version of its Instinct GPU for the Chinese market. AMD had warned last quarter that the restrictions of the MI308 could cost the company up to $800 million in writedowns. But now, AMD is set to realize that revenue, which is also likely to come at high margins. Finally, South Korean news outlet Newsis reported that AMD has raised the price of its Instinct MI350 AI accelerator from $15,000 to $25,000, good for a 67% increase. Although the hasn't confirmed it yet, if true, the price increase could indicate increased demand for the Instinct at major cloud companies. Up until now, AMD may have had to cut prices for major AI customers to try the Instinct over Nvidia's Blackwell chips. The price increase apparently shows that there's enough demand for Instinct and its price-performance characteristics. While the Instinct systems are still probably priced at a discount to Nvidia's Blackwell, the price increase seems to show AMD is more confident about Instinct's competitiveness. Investors will get more information when AMD reports earnings after the close today. Analysts expect revenue of $7.43 billion and earnings per share of $0.48, good for 27% and 30% growth, respectively. The stock has had a great run off the April lows, more than doubling to trade at 44 times this year's earnings estimates. So it may be difficult for AMD to top those lofty expectations, at least in the near term.

AMD Stock Declines as Earnings Drop 30% on Government Restricting Advanced AI Chip Sales to China | The Motley Fool

The stock's drop can probably be largely attributed to AMD's earnings per share (EPS) "only" meeting Wall Street's consensus estimate. Higher profit expectations were likely built into the stock price, as it had surged 44% in 2025 through Tuesday's regular trading session. On the plus side, the quarter's revenue comfortably beat Wall Street's expectation, as did revenue guidance for the third quarter. A noteworthy metric was free cash flow, which was a strong $1.2 billion -- a record quarterly high. As expected, AMD's results were hurt by the U.S. government's export controls on advanced artificial intelligence (AI) chips to China. These controls prevented the company from selling its Instinct MI308 data center graphics processing units (GPUs) to China. Moreover, the company's gross profit and, therefore, its bottom line were negatively impacted as these restrictions resulted in AMD taking about $800 million in inventory and related charges in the second quarter. Data source: Advanced Micro Devices. GAAP = generally accepted accounting principles. YOY = year over year. Investors should focus on the adjusted numbers, which exclude one-time items. Adjusted gross margin was 43%. Excluding the charges stemming from the export restrictions, the adjusted gross margin would have been about 54%. This metric was 53% in the year-ago period. Wall Street was looking for adjusted EPS of $0.48 on revenue of $7.43 billion, so AMD met the profit expectation and exceeded the revenue one. It also surpassed its own revenue guidance of 27% year-over-year growth. (It doesn't issue a profit outlook.) In the quarter, AMD generated cash of $2.01 billion running its operations, up from $593 million in the year-ago period. It ended the quarter with cash, cash equivalents, and short-term investments of $5.9 billion, and long-term debt of $3.2 billion. Data source: Advanced Micro Devices. *Client and gaming is a single reportable segment; I broke the two parts out for better clarity. **Calculations by author. YOY = year over year. QOQ = quarter over quarter. Data center growth was primarily driven by strong demand for the company's EPYC central processing units (CPUs) more than offsetting the negative impact of the China export controls on MI308 GPU sales. Client revenue -- which was a quarterly record -- was mainly driven by robust demand for the Zen 5, the latest Ryzen desktop CPUs, and a beneficial product mix. Gaming revenue was driven by an increase in semi-custom revenue and strong Radeon GPU demand. Embedded segment revenue edged down 4% year over year because demand in end markets remained mixed. This change was about the same as in the first quarter, when it was down 3% year over year. CEO Lisa Su's statement in the earnings release: We delivered strong revenue growth in the second quarter led by record server and PC processor sales. We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains. For the third quarter, management guided for: This outlook does not include any revenue from Instinct MI308 GPU shipments to China as the company's "license applications are currently under review by the U.S. Government," it said in the release. On the earnings call, CEO Su said that despite this, "we expect Instinct revenue to grow year over year in the third quarter, driven by the ramp of MI350 at multiple customers." Going into the release, Wall Street had been modeling for Q3 revenue of $8.32 billion, or 27% growth, so AMD's guidance surpassed this expectation. In short, AMD turned in as good a quarter as could be expected given the brisk headwind stemming from the AI chip export controls. The stock's decline was probably in part due to some investors feeling unsettled about the uncertainty still surrounding the export restrictions. We don't know how long it will take for the government to review the company's applications for licenses to sell its Instinct MI308 chips to China.

Veteran trader has strong opinions on AMD earnings report after stock runup

Sure, Advanced Micro Devices (AMD) was reporting its quarterly results, but the world's second-largest economy loomed large after the chipmaker's earnings fell short of expectations and raised concerns about the timing of a restart of shipments to China. Don't miss the move: Subscribe to TheStreet's free daily newsletter The Santa Clara, Calif., company reported an $800 million charge tied to a halted shipment of AI chips to China. "We delivered very strong second-quarter results, with revenue exceeding the midpoint of guidance, as higher EPYC and Ryzen processor sales more than offset headwinds from export controls that impacted Instinct sales," CEO Lisa Su told analysts during the company's earnings call. "We set records for both EPYC and Ryzen CPU sales, reflecting the broad-based demand for our differentiated high performance data center, PC and embedded processors," she added. Jerod Harris/Getty Images AMD CEO: China is an important market Su said data center AI business revenue declined year-over-year "as U.S. export restrictions effectively eliminated MI308 sales to China, and we began transitioning to our next-generation MI350 series accelerators." "Earlier this quarter, we were notified by the Department of Commerce that it is moving forward with the review of our license applications to export MI308 to China," she said. She referred to a custom-designed Instinct GPU developed to meet US export regulations while serving the Chinese market for high-performance AI hardware. "We appreciate the focus the Trump administration is placing on assuring that the U.S. technology remains central to global AI infrastructure and we expect to resume MI308 shipments as licenses are approved, subject to end-customer demand and supply-chain readiness." Since the licenses are still under review, Su said, the company was not including any MI308 revenue in its third-quarter outlook "I think the focus here on ensuring that US technology gets utilized throughout the world is something that we certainly support and very much want to contribute to," she said. "China is an important market for us. Given the timing of licenses, we have a number of licenses that are under review now." "We are working with the Department of Commerce to get those reviewed," she continued. "We do expect that once those licenses are approved, we will start MI308 shipments." AMD shares are up 36% this year. At last check the stock was down nearly 6%. Veteran trader: AMD balance sheet is in excellent condition "Despite being quiet about China, CEO Lisa Su was not quiet," The Street Pro's Stephen Guilfoyle said in his recent column. Guilfoyle, whose career dates back to the floor of the New York Stock Exchange in the 1980s, said that not only was guidance strong, "but it sounds like Su is intentionally being conservative." Cash flows are strong and getting stronger, the veteran trader said, adding that "the balance sheet is in excellent condition." "The stock had been on a run," Guilfoyle said. "I see the selloff as profit-taking, which is neither good nor bad; it is part of the natural ebb and flow of any marketplace and AMD needed to experience some consolidation. "I am not seeing any weakness in this stock ahead of any approval of sales to Chinese customers that had previously been prohibited as an opportunity," he added, who has a $209 price target on AMD shares. Several investment firms issued research reports after AMD posted its results. Analysts at Morgan Stanley said the quarter was strong across segments and revenue continues to be "quite strong, but it's not clear that will be enough to keep the bulls in charge of the narrative," according to The Fly. The firm, which lowered its price target on AMD to $168 from $185 and affirmed an equal-weight rating on the shares, said the timing for resuming sales to China was "more vague than expected." Morgan Stanley cited lower conviction in China demand and a lack of AI upside overall for the firm's lowered price target. Northland analyst Gus Richard boosted the firm's price target on AMD to $198 from $132 and reiterated an outperform rating. While AI revenue was hurt by export controls in the quarter, the analyst said, he expects AMD's China AI revenue to come back in calendar 2026. And he contended that the strong momentum AMD is seeing in AI is "still not reflected in consensus estimates." The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc. This story was originally published August 6, 2025 at 8:07 PM.

AMD Stock Slides After $800 Million Loss from AI Chip Ban to China

AMD Stock Drops 6% After Q2 Earnings Miss Amid China AI Chip Ban: What Investors Need to Know! A significant blow to AMD came in the form of the $800 million write-off of inventory. It was related to US government export restrictions on . The restrictions specifically impacted AMD's Instinct MI308 GPUs, which are one of the most important parts of the firm's AI products. Gross margins were impacted, declining to 43% adjusted, although they would have been 54% excluding charges. AMD's Data Center segment only posted 14% year-over-year growth, a sharp drop from 57% growth in Q1 2025. This decline is largely attributed to regulatory export concerns. Even in light of this, AMD's Client and Gaming segments posted strong rebounds, growing 67% and 73%. Gains in the sales of Ryzen CPUs and Radeon GPUs fueled this rebound. Looking ahead, AMD is forecasting Q3 2025 revenue of approximately $8.7 billion, implying 28% growth. CEO Lisa Su is upbeat, citing enhanced demand for the MI350 AI accelerators and the company's expanding AI ecosystem as a good prognosis for the future. Despite robust demand for AI chips and upbeat guidance, there are concerns. The timing of licensing decisions on the US chip exports to China is still unclear. Such uncertainty may continue to impact AMD's AI revenue, particularly as China was once a major market for its . The company's show strength in revenue expansion, but continued export restrictions to China pose a tangible obstacle. AMD's stock experienced a notable downturn following the company's disclosure. The future of the company rests on the demand for AI as well as the geopolitical change in chip policy.