AMD Q2 2025 Earnings Miss Expectations Amid AI Chip Demand and Export Challenges

Advanced Micro Devices (AMD) reported its second-quarter earnings for 2025 on August 5, revealing a mixed performance that sent its stock sliding about 5% in extended trading. While the chipmaker surpassed revenue expectations, it fell short on earnings, reflecting the complexities of navigating a booming AI market and stringent chip export controls. As the second-largest player in AI graphics processing units (GPUs), AMD is capitalizing on the surge in demand for AI infrastructure but faces hurdles that could shape its trajectory in the competitive semiconductor landscape.

For the quarter ending June 2025, AMD posted adjusted earnings per share of 48 cents, missing LSEG analysts’ expectations of 49 cents. Revenue, however, reached $7.69 billion, topping forecasts of $7.42 billion, driven by robust demand for its computing and AI product portfolio, particularly in data centers. This marks a significant 32% year-over-year revenue increase, with data center revenues alone climbing 14% to $3.2 billion. Net income for the quarter was $872 million, or 54 cents per share, a substantial improvement from $265 million, or 16 cents per share, in the same period last year.

AMD’s outlook for the current quarter is optimistic, projecting sales of $8.7 billion, plus or minus $300 million, compared to analyst expectations of $8.3 billion. CEO Lisa Su emphasized the company’s strong positioning, stating, “We are seeing robust demand across our computing & AI product portfolio & are well positioned to deliver significant growth.” This confidence aligns with analyst sentiments, with firms like Barclays and Wells Fargo maintaining overweight ratings and raising price targets to $200 and $185, respectively, citing AMD’s competitive advancements in CPU and GPU products.

The company’s growth is fueled by its data center business, particularly its MI350 AI chip, which HSBC recently evaluated as a strong competitor to Nvidia’s Blackwell B200. Reports indicate AMD raised the MI350’s price from $10K to $25K, boosting 2025 AI revenue forecasts from $9.6 billion to $15.1 billion. However, chip export controls pose a challenge, limiting AMD’s ability to ship to certain markets like China, despite a potential tailwind from resumed shipments noted by Melius Research.

Analysts remain cautiously optimistic. Bank of America raised its price target to $200, citing a “de-risked” PC outlook and strong cloud capital expenditure trends, while UBS highlighted an “upside bias” driven by AMD’s PC and server businesses. Yet, Wells Fargo noted that heavy R&D investments to keep pace with market leaders like Nvidia could limit operating leverage, tempering long-term share gains.

AMD’s Q2 results reflect a company riding the AI wave while navigating regulatory and competitive pressures. With its stock up over 46% in 2025, the chipmaker is poised for growth but must balance innovation with market constraints to maintain its momentum in the AI-driven semiconductor race.

Sources: CNBC, X posts