Advanced Micro Devices (NASDAQ:AMD) saw its shares drop over 5% in premarket trading after revealing underwhelming quarterly revenue from its key data center division.
The segment, which includes AMD’s vital artificial intelligence chips—considered crucial for the company’s growth—reported revenue of $3.2 billion, marking a 14% increase. This figure was in line with analysts’ estimates of $3.2 billion, according to LSEG data referenced by Reuters.
In contrast, Nvidia (NASDAQ:NVDA), a major competitor and leader in AI, posted a remarkable 73% surge in data center revenue to $39.11 billion in its fiscal first quarter earlier this year.
During a post-earnings call, AMD CEO Lisa Su explained that AI chip revenue had declined compared to the previous year, largely due to U.S. export restrictions on semiconductors to China and a transition to the company’s next-generation MI350 chips.
Although the data center segment underperformed and Su’s remarks drew attention, AMD projected a stronger-than-expected third-quarter revenue forecast of roughly $8.7 billion, plus or minus $300 million. The company noted that this outlook does not include revenue from shipments of its MI308 AI chip to China, with license applications currently under U.S. government review.
For the quarter ending June 29, 2025, AMD reported adjusted diluted earnings per share of $0.48 on $7.69 billion in revenue, versus analyst expectations of $0.48 per share and $7.41 billion in revenue.
“Our impression is positive,” said analysts at Daiwa Capital in a client note, adding that “this was a ‘price to perfection quarter’” for AMD following a 120% surge in its stock over four months.
Despite the premarket pullback ahead of Wednesday’s open on Wall Street, the analysts remain optimistic: “overall, we believe investors will be happy with this earnings report going forward.”
Advanced Micro Devices stock price
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