AMD Earnings: Q2 Revenue Surges 32%, EPS Meets Estimates.

AMD reported Q2 earnings of $0.48 per share, matching estimates, and revenue surged 32% to $7.68B. The company's stock dipped 4% following the release.

Advanced Micro Devices (AMD) reported its second-quarter 2025 earnings on July 2, with the company's stock dipping 4% following the release. The company reported earnings per share (EPS) of $0.48, matching analysts' estimates, and revenue surged 32% to $7.68 billion [1].

AMD's strong performance was driven by robust growth in its data center and client segments, with revenues from these segments increasing by 32% and 69%, respectively. The company's data center segment generated $3.2 billion in revenue, a 14% increase from last year, while the client and gaming segment reached $3.6 billion, up 69% year-over-year [2].

However, AMD faced challenges due to U.S. government export controls, particularly affecting shipments of its MI308 GPUs to China. These restrictions resulted in $800 million in inventory charges, significantly impacting the company's profitability. Excluding these charges, AMD's non-GAAP gross margin would have been approximately 54%, as opposed to the reported 43% [2].

Looking ahead, AMD forecasts third-quarter revenue of around $8.7 billion, anticipating a 28% increase compared to the same quarter last year. The company projects a non-GAAP gross margin of approximately 54%, reflecting strong confidence in its product line and market demand [2].

Despite the challenges, AMD's strategic moves, including the intended $3 billion sale of ZT Systems' data center infrastructure manufacturing business to Sanmina, position the company for sustained growth. The company's planned launches of the Instinct MI350 Series GPUs and next-generation EPYC processors are expected to bolster its growth trajectory [2].

Investors should closely monitor AMD's earnings report and analyst reactions to assess the stock's potential for a pullback or continued growth. While AMD's Q2 earnings were strong, the stock's valuation is overextended, with a 14-week RSI value of nearly 75, suggesting a significant pullback is likely [2].

References:
[1] https://www.tradingview.com/news/stockstory:22bd71a5e094b:0-amd-amd-q2-earnings-report-preview-what-to-look-for/
[2] https://www.ainvest.com/news/amd-stock-warning-earnings-2508/