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Advanced Micro Devices (NASDAQ: AMD) announced Q2 2025 revenue of $7.7 billion. This figure topped analysts' projection of $7.43 billion, which is also a 32% year-over-year growth. Adjusted earnings per share, however, totaled $0.48, somewhat below bullish investor hopes despite meeting Wall Street estimates. AMD adjusted its net income dropped 31% from year-earlier levels to $781 million.
AMD share price chart on TradingView saw a loss of 1.47%:
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 AI chips to China. 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 high-end GPUs.
The company’s quarterly earnings 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.
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