Advanced Micro Devices (NASDAQ: AMD) released its Q2 earnings report this week, revealing a mixed bag of results that sent AMD stock slightly lower in after-hours trading—even as it beat revenue estimates and reinforced its growing role in the AI chip market.
While the AMD earnings report showed revenue at $5.7 billion, surpassing Wall Street expectations by approximately $300 million, AMD earnings per share came in at $0.58—mostly in line with consensus. This slight earnings miss led to modest profit-taking, reflecting investor expectations of a blowout quarter after AMD’s stock price soared over the past few months.
AMD: AI-Driven Growth Remains a Strong Catalyst
A key focus of the AMD earnings call was the company’s momentum in the AI space. Senior semiconductor analyst Cody Acree highlighted AMD’s position as the “only viable alternative” to Nvidia in the general-purpose GPU and CPU space, especially with the increasing demand from hyperscalers such as Amazon, Microsoft, and Google.
AMD’s new MI350 and upcoming MI400 chips are showing competitive strength against Nvidia’s AI chips. While Nvidia still holds an edge in raw processing performance, AMD has carved out an advantage in memory bandwidth, an increasingly vital component for AI workloads.
As Acree put it, “AMD’s ability to move data quickly through its processors makes it a preferred option in hyperscale data centers.” This strategic positioning is expected to unlock significant upside potential, especially with the ongoing global AI arms race.
Rebound from China Sanctions May Boost AMD Stock Price
The reversal of China export restrictions could inject nearly $1.5 billion in lost revenue back into AMD’s future financials, according to Acree. The company previously excluded China-related shipments from its guidance, but signs suggest a fast recovery in this key market.
With the Trump-era restrictions now relaxed, AMD could regain momentum in one of the largest semiconductor markets globally. Investors are closely watching the developments, as any positive movement in Chinese markets could significantly affect AMD stock earnings in the next few quarters.
Bearish Sentiment from Some Analysts: A Healthy Debate
While Acree remains bullish on AMD, calling it a “strong buy,” not all experts share that optimism. Chris Versace of Tematica Research expressed caution, noting that competitors like Broadcom (AVGO) and Marvell Technology (MRVL) are better positioned in the custom ASIC market—another fast-growing AI segment.
Versace emphasized the value of niche AI chipmakers who cater to the specific infrastructure needs of hyperscalers. These alternatives might undercut general-purpose processors like AMD’s in certain enterprise workloads.
Still, both analysts agree that general CPUs—where AMD is currently outperforming Intel—remain foundational for data centers, meaning AMD retains a critical seat at the table, even as specialized AI chips evolve.
Why Did AMD Stock Dip? Profit-Taking or High Expectations?
Despite an optimistic forecast and healthy fundamentals, AMD stock price dipped slightly in the wake of the earnings call. Analysts attribute this to sky-high expectations heading into the Q2 release. As Acree explained, “Unless AMD delivered a blowout across the board, traders were bound to take profits.”
Even so, the long-term thesis remains strong. AMD’s continued expansion into AI, recovery in China, and dominance over Intel in the CPU market make it a compelling pick for long-term investors.
AMD Earnings Summary: Key Takeaways
- Q2 Revenue: $5.7 billion (beat expectations)
- EPS: $0.58 (in line with consensus)
- China Impact: $800M missing from Q2 due to restrictions; potential $1.5B upside with reversal
- AI Chips: MI350 and MI400 gaining traction; competitive with Nvidia on memory bandwidth
- Stock Reaction: Slight dip due to profit-taking, not weak fundamentals
As of now, CNBC and market analysts are keeping a close watch on AMD stock, especially as global AI investments and semiconductor demand continue to surge.
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