AMD Q3 Revenue Forecast Surpasses Estimates Amid AI Demand Surge

Advanced Micro Devices (AMD) has projected third-quarter revenue of approximately $8.7 billion, surpassing Wall Street forecasts of an average $8.30 billion [1][2]. The anticipated revenue growth reflects strong demand for AI-related hardware, with enterprises accelerating investments in data-center infrastructure to support AI workloads [4]. Key clients such as Microsoft, Meta Platforms, and OpenAI are increasingly adopting AMD’s advanced processors for AI applications [1]. Despite the optimistic revenue outlook, AMD shares declined by about 4% in after-hours trading, as some investors appeared unimpressed by the guidance [5].

The projected revenue for the third quarter does not include sales from AMD’s MI308 AI chip in China, as export licenses remain under U.S. government review [1]. In April, Washington imposed restrictions requiring a license for the export of advanced AI chips to China, and while the administration has quietly allowed sales of “China-compliant” chips, approvals for AMD’s MI308 are still pending [1]. This regulatory uncertainty has created a temporary ceiling on AMD’s potential revenue in one of its largest markets. The company has stated it will resume shipments once the necessary approvals are granted [1].

AMD’s Q2 2025 earnings report showed mixed performance, with revenue reaching $7.7 billion and non-GAAP earnings per share at $0.48 [7]. While revenue exceeded expectations, the company missed profit forecasts, contributing to a cautious investor sentiment [3]. For the third quarter, AMD has provided a revenue guidance range of $8.7 billion ± $300 million, indicating confidence in maintaining its upward trajectory [3]. The forecasted growth represents a year-over-year increase of approximately 28% compared to the same period in 2024 [6].

The market reaction to AMD’s Q3 forecast highlights the broader challenges facing the semiconductor industry. Despite strong revenue projections, AMD reported a negative operating margin of -1.7% for the quarter, a significant drop from 4.6% in the prior year [1]. Analysts have pointed out that while revenue growth is positive, investors are increasingly focused on profitability and cost efficiency [1]. The company’s expenses in R&D, production, and global supply chain logistics remain under scrutiny [1].

AMD’s leadership, under CEO Lisa Su, has been instrumental in transforming the company into a major player in computing technology. Over the past decade, AMD has capitalized on Intel’s challenges and now holds a market capitalization exceeding that of Intel by around $200 billion [1]. However, the company still trails significantly behind Nvidia, which has emerged as the dominant force in AI accelerators [1]. AMD remains the second-largest producer of graphics chips, with its CPUs competing directly with Intel in both PC and server markets [1].

Su has emphasized the importance of balancing export controls with broad technology adoption, particularly in the context of AI and semiconductors. She has advocated for a framework that supports U.S. economic growth while addressing national security concerns [1]. This approach aligns with AMD’s strategy to expand its U.S. manufacturing footprint, further positioning the company to benefit from ongoing industry trends [1].

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Source: [1] AMD (NASDAQ:AMD) Posts Better-Than-Expected Sales In ...(https://finance.yahoo.com/news/amd-nasdaq-amd-posts-better-212026769.html)

[2] AMD Stock Slides As Chipmaker Posts In-Line Earnings (https://www.investors.com/news/technology/amd-stock-fiscal-q2-2025-earnings/)

[3] AMD stock tumbles after flat Q2 profit miss as revenue beat ...(https://m.economictimes.com/news/international/us/amd-stock-tumbles-after-flat-q2-profit-miss-as-revenue-beat-rings-hollowbut-explosive-ai-momentum-fuels-blockbuster-q3-forecast/amp_articleshow/123127604.cms)

[4] AMD AI forecast shines a light on Q3 (https://www.indiatimes.com/trending/amd-stock-slips-after-q2-profit-miss-but-ai-driven-87-billion-q3-forecast-sparks-investor-hope-665967.html)

[5] AMD's Q3 Forecast Exceeds Estimates, Shares Fall 4% (https://www.ainvest.com/news/amd-q3-forecast-exceeds-estimates-shares-fall-4-2508/)

[6] AMD Earnings: Stock Slips Despite Strong Q2 Revenue ... (https://www.tipranks.com/news/amd-earnings-stock-slips-despite-strong-q2-revenue-growth)

[7] AMD Q2 2025 Earnings: $7.7 Billion Revenue, $0.48 EPS (https://globelynews.com/business/amd-q2-2025-earnings/)