Advanced Micro Devices (AMD) Stock: Why This Earnings Miss Actually Doesn't Matter

TLDR

Table of Contents

AMD beat Q2 earnings expectations with $0.48 adjusted EPS vs $0.47 estimate and revenue of $7.7 billion vs $7.4 billion forecast
Seven of the top 10 AI companies now use AMD’s Instinct MI350 chips, showing growing adoption against NVIDIA
Stock surged 43.9% over three months, outperforming tech sector returns of 13.3% in same period
China export restrictions will impact AMD by $1.5 billion in revenue, primarily affecting Q2 and Q3 2025
Wall Street maintains “Moderate Buy” rating with $189.65 price target, suggesting 16.6% upside potential

Advanced Micro Devices delivered another solid earnings beat that sent shares climbing over 6% in the following trading session. The semiconductor company reported adjusted earnings per share of $0.48, edging past Wall Street’s estimate of $0.47.

Revenue came in at $7.7 billion, beating forecasts of $7.4 billion. The company also provided strong guidance for Q3, projecting revenue between $8.4 billion and $9 billion.

The earnings miss mentioned in some reports was minimal – just one cent on adjusted per-share profit. This brief decline quickly recovered as investors focused on the bigger picture.

Advanced Micro Devices, $AMD, Q2-25 Results:
📊 Adj. EPS: $0.48 🟢
💰 Revenue: $7.69B 🟢
📈 Net Income: $872M
🔎 Record revenue driven by server and PC processor sales despite export restrictions on data center GPUs. pic.twitter.com/WpvXmzMF34
— EarningsTime (@Earnings_Time) August 5, 2025

AMD stock has been on a tear lately, soaring 43.9% over the past three months. That performance easily outpaced the Technology Select Sector SPDR Fund’s 13.3% returns during the same period.

Over the past 52 weeks, AMD shares have climbed 34.6% while gaining 11.1% year-to-date in 2025. The stock has been trading above its 50-day moving average since early May.

Despite this strength, AMD sits 12.9% below its recent 52-week high of $186.65, which it hit on August 13th. The stock currently trades at over 100 times trailing earnings, though the forward earnings multiple sits at 44.

Growing AI Chip Adoption

The most compelling development came from CEO Lisa Su’s revelation during the earnings call. Seven of the top 10 model builders and AI companies now use AMD’s Instinct chips.

This represents a major breakthrough against NVIDIA’s dominance in the AI accelerator market. The current MI350 chips are already seeing this adoption rate.

AMD recently launched its Instinct MI350 series GPUs, designed to compete directly with NVIDIA’s offerings. The company has secured partnerships with major tech companies including OpenAI, Microsoft, Meta, and Amazon Web Services.

OpenAI CEO Sam Altman previously expressed enthusiasm about AMD’s upcoming MI400 chips, which will be available next year. These advanced chips may see even higher adoption rates.

Analysts expect AMD’s GPU sales to reach $1.3 billion in Q3 2025 and $2.2 billion in Q4 2025. That represents strong quarter-over-quarter growth as the company gains traction.

The company is also working on its next-generation AI platform, codenamed “Helios,” set to launch in 2026. This platform will feature the Zen 6 EPYC CPU and Instinct MI400 GPU.

China Export Restrictions Impact

AMD faces near-term challenges from export restrictions on high-performance chips to China. The company announced a $1.5 billion impact from China-based MI308 revenues.

These restrictions primarily affect the second and third quarters of 2025. The geopolitical risks highlight challenges facing semiconductor companies with international exposure.

Despite these headwinds, AMD maintains a positive outlook. Management expects strong double-digit growth in its Data Center Instinct segment.

AMD’s sales growth has remained firmly above 20% for multiple quarters. The trend has been consistently positive over the past year.

In desktop processors, the company’s desktop MPU share increased to 30.2% in recent quarters. This shows AMD continues gaining market share across multiple segments.

Wall Street analysts remain moderately bullish on AMD’s prospects. The stock carries a consensus “Moderate Buy” rating from 44 analysts covering it.

The mean price target of $189.65 suggests potential upside of 16.6% from current levels. Recent analyst upgrades from Truist Securities at $213 and Barclays at $200 show growing optimism.

AMD projects Q3 revenue between $8.4 billion and $9 billion, showing management’s confidence in continued growth momentum.

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