AMD Q2 Revenue Up 32% YoY, Data Center Revenue Down 11.8% Seq.

AMD reported a 32% YoY revenue growth to $7.68 billion, but its data center revenue decreased 11.8% sequentially. Analysts predict a 5.38% upside potential for AMD's stock price, with a consensus rating of "Outperform." The GF Value estimate suggests a 0.91% upside potential from the current price of $172.76.

Advanced Micro Devices (AMD) reported mixed second-quarter (Q2) results on July 2, 2025, with a 32% year-over-year (YoY) revenue growth to $7.68 billion, despite a significant drop in data center revenue. The company's stock surged 5.7% in after-hours trading, driven by optimism around potential US tariff exemptions and strong Q3 revenue guidance.

Key highlights from AMD's Q2 results include:

- Revenue Growth: AMD reported a record revenue of $7.7 billion, up 32% YoY, but an $800 million inventory write-down due to US export restrictions on AI chips bound for China [1].
- Data Center Revenue: The company's data center segment saw a 14% YoY increase to $3.2 billion, a decrease of 11.8% sequentially [2].
- AI Chip Impact: The AI business, including the MI308 AI chips, faced a significant setback due to US export restrictions, resulting in an $800 million impact on revenue in the June quarter [1].
- Q3 Revenue Guidance: AMD guided for Q3 revenue of about $8.7 billion, exceeding analysts' estimates of $8.30 billion [2].

Analysts predict a 5.38% upside potential for AMD's stock price, with a consensus rating of "Outperform." The GF Value estimate suggests a 0.91% upside potential from the current price of $172.76 [4].

AMD's peers, Nvidia and Broadcom, also gained on the day, with investors rotating back into chip stocks on optimism around potential US tariff exemptions. The company's shares have climbed more than 40% this year, outpacing the benchmark chip index, as investors bet on AMD's ability to capitalize on the widespread use of AI [1].

Despite the strong revenue growth and positive outlook, AMD's stock experienced some volatility in after-hours trading. This mixed reaction may be attributed to concerns over the ongoing export restrictions and the high valuation pressure on tech stocks [2].

AMD is positioning itself as a strong competitor in the AI chip market, currently dominated by Nvidia. The company recently announced new AI chips called the MI400, expected to hit the market next year, with OpenAI CEO Sam Altman committing to use AMD's newest GPUs [2].

References:
[1] https://www.ainvest.com/news/amd-surges-5-7-earnings-headwinds-chip-stock-rally-2508/
[2] https://www.reddit.com/r/AMD_Stock/comments/1mirsp1/amd_has_now_delivered_two_consecutive_quarters_of/
[3] https://www.manilatimes.net/2025/08/07/business/foreign-business/amd-data-center-results-disappoint/2163285
[4] https://www.tipranks.com/news/why-are-some-analysts-cautious-on-amd-stock-despite-ai-hype