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AMD’s Q2 2025 Earnings: Revenue Surpasses Estimates, Earnings Slightly Below Expectations

Advanced Micro Devices (AMD) released its fiscal second-quarter earnings on Tuesday, delivering a mixed report that pleased investors with top-line growth but fell just short of earnings per share forecasts. Shares dropped about 5% in after-hours trading as market watchers digested the details.

Here’s how AMD performed versus LSEG consensus for the quarter ending June 30:

• Adjusted Earnings Per Share: 48 cents (vs. 49 cents expected)
• Revenue: $7.69 billion (vs. $7.42 billion expected)
• Net Income: $872 million, or 54 cents per share (up from $265 million, or 16 cents per share a year ago)

The revenue growth of 3.6% year-over-year was driven by strength in AMD’s gaming and data center segments, though the earnings miss reflected pressure from export controls and ongoing market challenges.

Market Position and Competitive Landscape

AMD remains the second-largest GPU maker for artificial intelligence workloads, trailing market leader Nvidia, which posted a 32% sales increase over the same period, reaching $5.84 billion.

Despite Nvidia’s dominance, major AI customers like Meta and OpenAI are increasingly turning to AMD for alternatives, especially for inference tasks where AI models are deployed at scale. In fact, OpenAI CEO Sam Altman has publicly committed to incorporating AMD’s latest GPUs in their infrastructure.

Impact of U.S. Export Restrictions

A major challenge for AMD this quarter was the U.S. government’s export controls on advanced AI chips. The company’s MI308 AI chip has been restricted from shipments to China since April 2025, resulting in an estimated $800 million revenue loss in the quarter.

CEO Lisa Su explained on the earnings call:

“Our AI business revenue declined year-over-year due to U.S. export restrictions that effectively paused MI308 sales to China. However, we’re transitioning to the next-generation Instinct MI400 chips, expected to launch next year.”

She added that shipment of the MI308 may resume pending regulatory approvals, but current revenue guidance excludes any China-related sales.

New AI Chips and Product Pipeline

AMD introduced the Instinct MI400 series AI chips, slated for release next year, aiming to better compete with Nvidia’s flagship GPUs. Su highlighted the Instinct MI350 as competitive with Nvidia’s GB200 chips for both AI training and inference workloads.

“Seven of the top 10 AI model builders currently use our Instinct chips,” Su noted, underscoring growing adoption by major industry players.

Segment Performance and Growth Drivers

• Data Center Segment: $3.2 billion revenue, up 14% year-over-year. Increased demand for AMD’s CPUs and GPUs, particularly for AI-optimized servers, fueled growth. Su highlighted robust capital expenditures from cloud providers that include both GPUs and CPUs.
• Client and Gaming Segment: $3.6 billion revenue, a 69% increase year-over-year.
  • Client revenue (CPUs for laptops/desktops) rose 57% to $2.5 billion, in line with estimates.
  • Gaming revenue surged 73% to $1.1 billion, beating the $784 million consensus, driven by demand for gaming GPUs and custom chips for consoles like the PlayStation and Xbox.

AMD’s Ryzen Zen 5 desktop CPUs contributed significantly to the client segment’s strong performance.

Outlook for Q3 and Beyond

For the third quarter, AMD forecasts sales between $8.4 billion and $9.0 billion, higher than the $8.3 billion analysts expected, signaling optimism despite ongoing export challenges.

With a 43% adjusted gross margin, down from a hypothetical 54% if not for export control costs, AMD is navigating a complex global trade landscape while pursuing growth in AI and gaming markets.

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AMD’s Q2 report highlights the company’s resilience amid external pressures such as U.S. export restrictions and fierce competition from Nvidia. With a growing footprint in AI infrastructure and strong momentum in gaming CPUs and GPUs, AMD is positioned for steady revenue growth — though near-term earnings face some pressure.

Investors will be watching closely how regulatory developments around AI chip exports and market adoption of AMD’s next-generation Instinct GPUs influence the company’s trajectory in 2025 and beyond.

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