AMD Faces Pre-Market Decline Amid Mixed Q2 Earnings Report

Author: Evelyn Baker Updated: 08-06-2025 07:04 AM

AMD Stock Experiences a Noticeable Decline

Advanced Micro Devices (NASDAQ: AMD) witnessed a significant drop of 6.08% in pre-market trading. This notable decline followed the company's recent earnings report for the second quarter, which showcased a slight miss in earnings per share (EPS).

Revenue Highlights from Q2

The company's Q2 revenue reached a commendable $5.49 billion, which surpassed the consensus estimates of $5.44 billion. Despite this positive revenue news, earnings per share were reported at $0.58, falling short of the forecasted $0.60.

Data Center Revenue Growth

AMD's data center revenue amounted to $3.2 billion, reflecting a solid 14% year-over-year growth. However, when compared to Nvidia (NASDAQ: NVDA), which reported an impressive 73% growth in their data center segment in their latest earnings release, AMD's figures show a competitive landscape.

Margins and Export Restrictions

In terms of profitability, AMD reported a non-GAAP gross margin of 43% for the quarter. The company attributed approximately $800 million in inventory and related charges to U.S. government export restrictions impacting its AMD Instinct MI308 GPUs. If not for these charges, gross margin would have been an impressive 54%.

CEO's Insight on Future Growth

Dr. Lisa Su, CEO of AMD, expressed confidence in the company’s trajectory, stating they are "on track for a strong second half" due to significant customer demand for artificial intelligence (AI) products.

Introducing the Next-Gen AI Chip

Su also revealed details about AMD's forthcoming AI chip, the Instinct MI355, which is expected to launch in 2026. This chip aims to provide a competitive edge against Nvidia's GB200 and B200, targeting clients seeking scalable and open alternatives in AI computing.

Enhanced Performance Goals

The MI355 chip is designed to build upon the success of the MI300X, with enhanced memory performance and energy efficiency—two vital aspects in high-performance computing environments.

Forward-Looking Projections for AMD

AMD has reaffirmed its full-year outlook, projecting that sales in AI accelerators will exceed $4 billion by 2025. The company is bolstered by robust product pipelines, strong AI trends, and an expanding global market presence, firmly establishing itself as Nvidia's closest rival in the AI hardware segment.

Conclusion and Market Rankings

In terms of momentum, AMD ranks in the 88th percentile, whereas it falls to the 11th percentile for value. This performance reflects a mixed analysis of the company’s metrics and indicates areas of strength as well as challenges on the horizon.

Frequently Asked Questions

Why did AMD's stock drop in pre-market trading?

AMD's stock dropped due to a slight miss in its earnings per share during its Q2 earnings report, despite positive revenue figures.

What were AMD's revenue figures for Q2?

AMD reported a revenue of $5.49 billion for the second quarter, surpassing the consensus estimate of $5.44 billion.

How did AMD's data center revenue perform?

The data center revenue grew to $3.2 billion, showing a year-over-year increase of 14%.

What did AMD attribute its gross margin decrease to?

AMD cited U.S. government export restrictions impacting its products, which caused significant inventory charges affecting gross margins.

What does the future look like for AMD?

AMD has expressed confidence in a strong second half of the year with continued demand for AI products and favorable long-term projections.

About The Author

Greetings, I'm 32-year-old author and financial specialist Evelyn Baker. My introduction into the financial industry started with an economics degree and continued with a wealth of experience in wealth management and financial consulting. My great passion over the years has been assisting people and companies in making wise, well-informed decisions to reach their financial objectives.

My goal with writing is to simplify difficult financial ideas into understandable, doable guidance. My goal in writing many books and articles is to make personal finance understandable to everyone, irrespective of their experience or background. I want to give readers the information they need to take charge of their financial futures, from investing and retirement planning to budgeting and saving.

Along with my writing, I lead webinars and workshops where I provide doable advice and methods for achieving financial success. To reach a larger audience, I also frequently contribute to financial blogs and publications. My method is always to offer doable, real-world guidance that can actually improve people's lives.

Aside from my job, I like to cook, travel, and experience other cultures. I work hard to apply my belief in the value of a balanced life to my financial counsel. My goal in working is to encourage and enable people to succeed financially so they may lead the best lives possible.

Contact Evelyn Baker privately here. Or send an email with ATTN: Evelyn Baker as the subject to contact@investorshangout.com.

About Investors Hangout

Investors Hangout is a leading online stock forum for financial discussion and learning, offering a wide range of free tools and resources. It draws in traders of all levels, who exchange market knowledge, investigate trading tactics, and keep an eye on industry developments in real time. Featuring financial articles, stock message boards, quotes, charts, company profiles, and live news updates. Through cooperative learning and a wealth of informational resources, it helps users from novices creating their first portfolios to experts honing their techniques. Join Investors Hangout today: https://investorshangout.com/

The content of this article is based on factual, publicly available information and does not represent legal, financial, or investment advice. Investors Hangout does not offer financial advice, and the author is not a licensed financial advisor. Consult a qualified advisor before making any financial or investment decisions based on this article. This article should not be considered advice to purchase, sell, or hold any securities or other investments. If any of the material provided here is inaccurate, please contact us for corrections.