Advanced Micro Devices (AMD) reported quarterly earnings that missed estimates, sending the stock down 5% in extended trading. The company trails Nvidia in the market for graphics processing units (GPUs), but is gaining traction with big customers like Meta and OpenAI looking for alternative chips.
In its fiscal second quarter, AMD reported net income of $872 million, or 54 cents per share, increasing from $265 million a year ago. However, earnings per share missed expectations by 1 cent, and revenue fell short by $270 million.
Despite the miss, AMD is optimistic about its future prospects. The company expects sales of $8.7 billion in the current quarter, with revenue from its AI chips expected to grow year over year. AMD’s CEO Lisa Su said that her company’s new AI chips, such as Instinct MI400 and MI350, are competitive with Nvidia’s products.
However, AMD is facing challenges due to US export controls on its AI chips, which have limited sales in China. The company expects to resume shipments of the affected chips after the Trump administration signals approval for waivers. Su also noted that AMD’s adjusted gross margin was lower than expected due to export control costs.
AMD’s data center segment saw increased demand for its CPUs and GPUs, driven by growing interest in GPU-based AI servers. Revenue from this segment rose 14% on an annual basis. Client and Gaming revenue also surged 69% year over year, driven by strong demand for AMD’s Ryzen Zen 5 desktop CPUs.
Overall, while AMD missed expectations, the company remains optimistic about its future prospects. Its new AI chips are gaining traction with big customers, and its data center segment is seeing increasing demand.
Source: https://www.cnbc.com/2025/08/05/amd-earnings-report-2q-2025.html