AMD Stock Dips Despite Beating Revenue Estimates

AMD Stock Slides Despite Strong Revenue Growth in Q2 Earnings Report

Advanced Micro Devices (AMD stock) saw a mixed reaction in after-hours trading Tuesday after reporting second-quarter earnings that beat revenue expectations but faced margin pressures due to U.S. export restrictions. The semiconductor giant posted record revenue of $7.67 billion, up 32% year-over-year and surpassing analyst estimates of $7.43 billion. However, adjusted earnings per share came in at $0.48, only matching forecasts, and shares dipped about 3% following the report.

The company’s Data Center segment, a key growth driver, brought in $3.2 billion, up 14% but slightly below expectations. Meanwhile, the Client segment (PC processors) saw a massive 67% jump to $2.5 billion, matching projections, and Gaming revenue surged 73% to $1.1 billion, exceeding estimates. The Embedded segment was the lone weak spot, declining 4% to $824 million.

CEO Lisa Su highlighted strong demand for AMD’s computing and AI products, stating, “We are seeing robust demand across our portfolio and are well positioned for significant growth in the second half of the year.” However, gross margins took a hit, coming in at 43% instead of an expected 54% due to an $800 million charge related to U.S. export controls on its AI-focused AMD Instinct MI308 data center GPUs.

The restrictions, which tightened chip exports to China, forced AMD to halt some shipments temporarily. While the company expects to resume MI308 exports after final U.S. government approval, the financial impact was significant enough to weigh on profitability.

Looking ahead, AMD provided optimistic guidance for Q3, forecasting revenue between $8.4 billion and $9.0 billion—above Wall Street’s $8.28 billion estimate. However, this outlook excludes potential AMD MI308 sales to China, leaving some uncertainty.

Despite the strong revenue performance, investors seemed concerned about margin pressures and geopolitical risks. AMD stock, which had risen nearly 45% year-to-date before the report, initially climbed in after-hours trading before reversing gains. The market’s reaction suggests that while AMD’s growth trajectory remains solid, near-term challenges—particularly in AI chip exports—could keep volatility elevated.

With AI and data center demand still booming, AMD remains a key player in the semiconductor space. But for AMD stock to regain momentum, investors will want clearer signs of margin recovery and sustained growth beyond export-related hurdles.

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