AMD Reports Record Revenue in Q2’25, Margins Affected

Stock Reaction: AMD shares traded lower by 3.82% in after-hours. Stock closed 163.12 −11.19 (6.42%) on Wed Aug 6.

Revenue: $7.69B (↑32% YoY, ↑3% QoQ)
Net Income: $872M (↑229% YoY)
EPS (GAAP): $0.54 (vs. $0.16 Q2’24)
Operating Loss: $(134)M due to $800M inventory charge from U.S. export restrictions on MI308 GPUs
Gross Margin: 40% (↓9pts YoY)
Free Cash Flow: $1.18B (record high)

Data Center: $3.2B, ↑14% YoY
- Strong EPYC sales, but MI308 GPU sales to China restricted
Client & Gaming: $3.6B, ↑69% YoY
- Record Client revenue ($2.5B), strong “Zen 5” Ryzen and Radeon GPU sales
- Gaming revenue ↑73% YoY on semi-custom and GPU strength
Embedded: $824M, ↓4% YoY

Revenue: ~$8.7B ± $300M (↑13% QoQ, ↑28% YoY midpoint)
Non-GAAP Gross Margin: ~54%
MI308 sales to China: Not included in guidance; export license still pending

AI Momentum:
- Launch of MI350 Series and “Helios” rack-scale platform
- ROCm 7 open-source stack
- Strategic collaborations with Meta, OpenAI, Microsoft, xAI, Red Hat, Dell
Infrastructure Growth:
- HUMAIN to deploy 500MW AI compute with AMD
- Nokia to use 5th Gen EPYC in its telecom platforms
ZT Systems Divestiture: $3B deal to sell data center manufacturing business to Sanmina

Positive: Client/Gaming outperformance shows AMD’s product strength is resonating with consumers. Free cash flow and strong revenue growth offer a solid foundation heading into H2.
Challenge: Export controls remain a headwind for high-margin data center GPU sales, muting full potential of AI tailwinds. Gross margin compression signals rising costs and inventory risks.
Outlook: Guidance implies continued momentum with MI350 ramp and Ryzen/EPYC share gains, keeping AMD in strong competitive positioning vs. peers like $NVDA and $INTC.