TLDR
- AMD and Nvidia agreed to pay the U.S. government 15% of revenues from specific AI chips sold in China in exchange for export licenses
- AMD reported record quarterly revenue of $7.7 billion with 32% year-over-year growth driven by server and AI chip demand
- The company’s gross margin hit 40% despite inventory charges from new U.S. export controls on China
- AMD projects Q3 2025 revenue of $8.7 billion as demand accelerates in AI and enterprise segments
- The chipmaker plans to sell its ZT Systems manufacturing business for $3 billion to strengthen data center partnerships
AMD stock continues trading at strong levels following news of an unprecedented revenue-sharing arrangement with the U.S. government. The chipmaker has agreed to pay 15% of revenues from specific AI chip sales to China in exchange for export licenses.
This deal covers AMD’s MI308 chips alongside Nvidia’s H20 processors. The Financial Times first reported this arrangement between the two major chipmakers and the White House.
The agreement comes as President Trump’s tariff policies reshape global semiconductor trade. Trump previously threatened 100% tariffs on chip imports unless companies build facilities in the United States.
AMD’s recent financial performance shows the company navigating these trade challenges effectively. The company reported record quarterly revenue of $7.7 billion on August 5, 2025.
Net income reached $872 million on a GAAP basis. Year-over-year revenue jumped 32%, driven by strong demand across multiple product lines.
Strong Performance Across Product Lines
Server chip sales powered much of AMD’s growth through its EPYC processor line. PC processors from the Ryzen family also contributed to revenue gains.
AI accelerator chips from the Instinct series showed continued momentum. However, export restrictions did impact some Instinct GPU shipments to international markets.
Gross margin came in at 40% on a GAAP basis and 43% on a non-GAAP basis. Inventory charges related to new U.S. export controls on China affected profitability metrics.
The company projects Q3 2025 revenue of approximately $8.7 billion. This guidance reflects accelerating demand in AI and enterprise market segments.
AMD recently announced plans to divest its ZT Systems manufacturing business. The $3 billion sale aims to strengthen partnerships in data center and AI infrastructure markets.
Recent Product Launches Drive Market Position
New product releases continue expanding AMD’s market reach. The company launched new Ryzen Threadripper chips targeting high-performance workstation users.
Gaming enthusiasts can access the new Radeon RX 9060 XT graphics card. Professional users now have the Radeon AI PRO R9700 GPU for specialized applications.
Analyst commentary remains positive on AMD’s competitive positioning. The company continues gaining processor market share against established competitors.
Leadership in AI hardware development supports long-term growth prospects. Enterprise and data center solution demand shows particular strength.
Export restrictions present short-term headwinds for international sales. However, AMD’s Q3 guidance suggests robust performance expectations for the remainder of 2025.
AMD stock trades at $172.76 per share in after-hours trading with a 0.21% uptick from the previous session.
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