AMD Plunges 4.94% as Profitability Concerns Mount

On August 6, 2025, Advanced Micro Devices (AMD) experienced a 4.94% drop in pre-market trading, reflecting investor concerns and market sentiment.

AMD reported a loss per share of $0.01 for the quarter, which was better than the estimated loss of $0.03. However, the company's revenue growth of 4% annually to $1.6 billion did not fully satisfy investor expectations, leading to a decline in stock price.

Despite strong Q2 revenue growth driven by the gaming sector, AMD faced margin compression, which impacted its profitability. This led to a downgrade in the company's rating, further affecting investor confidence.

AMD's Q3 revenue forecast surpassed estimates, but investors remained cautious about the company's profitability. The second quarter earnings missed profit targets, raising questions about the sustainability of AMD's growth.

AMD's restricted access to China's AI chip market is expected to result in a $1.5 billion hit to revenue this year, with most of the impact affecting the second and third quarters. This regulatory challenge adds to the company's operational difficulties.

Overall, while AMD's revenue performance has been robust, concerns over profitability and regulatory hurdles have weighed heavily on the stock, contributing to the recent decline in its share price.