AMD Stock Price Slips After Q2 Profit Miss, But $8.7 Billion AI Forecast Sparks Optimism

Advanced Micro Devices (AMD) saw its stock price dip after releasing its Q2 2025 results, narrowly missing profit expectations. While earnings per share came in just below analyst forecasts, the company beat revenue projections and issued a strong Q3 outlook fueled by growing demand for AI chips. Investors remain cautiously optimistic as AMD positions itself to challenge Nvidia in the artificial intelligence space.

How did AMD stock price react to Q2 2025 earnings?

AMD reported adjusted earnings of 48 cents per share in the second quarter of 2025, slightly under the 49-cent forecast. Despite the earnings miss, revenue surged to $7.7 billion, beating Wall Street expectations of $7.4 billion. This marked a robust 32% year-over-year increase, driven primarily by demand in personal computing and gaming sectors.

However, the AMD stock price declined in after-hours trading. The market reaction was shaped by concerns over regulatory hurdles, especially U.S. export restrictions that impacted shipments of the company’s MI308 AI chips to China. These restrictions alone accounted for an estimated $800 million in lost revenue during the quarter.

The company also reported a net income of $872 million, a significant improvement from $265 million a year earlier. However, the operating margin was impacted, as the cost of navigating international trade policies continues to be a burden on AMD’s bottom line.

What is fueling AMD’s optimistic Q3 2025 forecast?

Despite the earnings miss, AMD projected strong momentum for the third quarter. The company forecasts revenue of approximately $8.7 billion, with a margin of $300 million either way. This is higher than analyst expectations and indicates growing confidence in its AI offerings.

CEO Lisa Su emphasized the rollout of AMD’s Instinct MI350 series as a key growth driver. These AI chips are designed to compete directly with Nvidia’s Blackwell architecture, and early adoption appears promising. According to Su, seven of the top ten AI companies are already using AMD’s Instinct accelerators, suggesting that demand is scaling rapidly.

The Q3 outlook does not include potential revenue from China-bound AI chips, as AMD is still waiting for final clearance to resume exports. Once approved, these sales could significantly boost future financial results, potentially recapturing revenue lost in the second quarter.

Segment analysis: How AMD’s businesses performed in Q2

While artificial intelligence dominated headlines, AMD’s core businesses also showed solid performance:

• Gaming: Revenue rose to $1.1 billion, a 73% increase compared to last year. This was driven by strong demand for GPUs and semi-custom chips used in popular gaming consoles.

• Client Computing: The segment generated $2.5 billion, up 57% year-over-year. AMD’s Ryzen CPUs continued to gain market share from Intel in both desktop and mobile categories.

• Data Center: This business unit brought in $3.2 billion, a 14% increase. However, it fell slightly short of expectations due to delayed international shipments and geopolitical trade constraints.

AMD’s diversified portfolio across AI, gaming, and client computing helped balance the impact of temporary export challenges.

Can AMD close the gap with Nvidia in AI?

While Nvidia remains the leader in AI chip manufacturing—especially for model training—AMD is steadily gaining ground. The company is focusing on the inference market, where power efficiency and cost-effectiveness are more important.

The MI350 series reportedly offers four times the performance and 35 times greater inferencing capabilities compared to AMD’s previous models. If real-world adoption matches these performance claims, AMD could begin narrowing the competitive gap faster than expected.

Looking forward, AMD is also preparing to launch its MI400 series, which is expected to hit the market in 2026. This continuous pipeline of AI-focused products underscores AMD’s ambition to compete aggressively in the sector.

AMD stock price may have dipped on a profit miss, but the company’s strong Q3 outlook, rising AI momentum, and recovering traditional segments suggest its long-term strategy remains on course.

You Must Know

Q: Why did AMD stock price fall after earnings?
A: The stock price dropped slightly due to a narrow miss on profit expectations and concerns over lost revenue from U.S. export restrictions to China, despite strong revenue growth.

Q: How much revenue did AMD report in Q2 2025?
A: AMD reported $7.7 billion in Q2 revenue, beating analyst estimates and reflecting a 32% year-over-year increase.

Q: What is AMD’s Q3 revenue forecast?
A: AMD expects revenue of approximately $8.7 billion for the third quarter of 2025, higher than the consensus estimate.

Q: What AI products are boosting AMD’s performance?
A: AMD’s Instinct MI350 series is gaining traction in the AI space, competing with Nvidia’s chips and already used by seven of the top ten AI firms.

Q: When will AMD resume AI chip exports to China?
A: Although the U.S. has relaxed some restrictions, AMD is still waiting for final clearance to resume shipments of its MI308 chips to China.