AMD Shares Plunge 6.4% Despite Record Revenue Surge, Ranked Fourth in $21.7 Billion Trading Volume

On August 6, 2025, Advanced Micro Devices (AMD) closed with a 6.42% decline, despite a 32% year-over-year revenue increase to $7.69 billion. The stock traded at a daily volume of $21.71 billion, up 40.29% from the prior day, ranking fourth in market activity. The drop followed a mixed Q2 earnings report marked by strong data center revenue growth but margin pressures and regulatory uncertainties.

AMD’s data center revenue rose to $3.2 billion, driven by EPYC CPU demand, though MI308 GPU shipments fell 12% sequentially due to U.S. export controls. Management highlighted accelerated MI350 AI GPU production, with $7 billion in 2024 shipment guidance, but excluded China-related revenue from forecasts amid regulatory hurdles. Adjusted gross margins dipped to 43%, pressured by an $800 million inventory charge tied to export restrictions, contributing to a GAAP operating loss of $134 million.

Q3 revenue guidance of $8.7 billion and a 54% gross margin outlook signaled improved product mix, though risks persist from geopolitical tensions and a high valuation (44x forward P/E). The Client and Gaming segment reported a 69% year-over-year revenue surge to $3.6 billion, while the Embedded segment declined 4%. Management emphasized strategic investments in open AI ecosystems and partnerships with TSMC to secure advanced manufacturing capacity.

Export controls remain a critical overhang, with no clarity on U.S. licensing approvals for China-bound shipments. While MI350 production ramps and hyperscaler demand is robust, the inability to monetize China-related GPUs could constrain near-term data center growth. Analysts remain cautiously optimistic about AMD’s long-term positioning, citing share gains in server CPUs and disciplined operational shifts, but near-term execution and regulatory clarity will be pivotal.

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