AMD shares dip after mixed Q2 results

The chip maker shows solid growth but faces China export limits that could alter its AI ambitions.

AMD Bets on AI Growth Amid China Export Tightening

Advanced Micro Devices posted revenue of $7.69 billion in the second quarter, up 32% year over year, while adjusted earnings per share were $0.48, below the $0.49 expected by analysts. The miss was driven in part by an $800 million inventory write-down tied to export controls in China. The data center segment grew 14% year over year to $3.2 billion, but sales were affected by the ban on MI308 GPUs in China. AMD noted that shipments to China are not in its Q3 guidance, signaling a possible rebound if export licenses are approved.

Outside China, the company highlighted progress with the MI300 and MI325 GPUs and continued CPU gains in the server market. The client and gaming segment rose 69% to $3.6 billion, boosted by notebook demand and strong sales of new gaming GPUs. The embedded business fell 4% to $824 million, though management expects sequential growth in the second half. For the third quarter, AMD guided revenue of about $8.7 billion, plus or minus $300 million, excluding any MI308 shipments to China. The longer term view remains tied to AI inference and the potential return of China shipments.

The China export restrictions create a clear near term headwind, but the longer horizon in AI could still deliver upside if policy shifts open the door to shipments. A policy change would likely lift AI revenue faster than new product launches alone, making the next few quarters a test of how quickly AMD can scale its inferencing stack without the China boost. This tension between policy risk and product momentum is a defining feature for AMD and peers in this cycle.

Valuation sits around 27.5 times the 2026 consensus earnings, a multiple that could expand if AMD proves it can grab a meaningful slice of the AI inference market. The stock remains a bet on execution and policy timing as much as quarterly results, with Nvidia as a key benchmark for performance and price. The big takeaway for investors is simple: policy clarity will shape how quickly AMD translates AI momentum into real profits.

Highlights

Policy timing will shape the next leg of AMD's journey