AMD has released its latest quarterly results, and while the company posted record-breaking revenue, investors were left unimpressed. Despite generating $7.685 billion in revenue during Q2 2025 — a 32% increase year-over-year — AMD reported an operating loss, sending the AMD stock (AMD Aktie) down nearly 4% in after-hours trading.
Record Revenue, But Operating Loss Raises Concerns
AMD’s strong performance in its Ryzen and Epyc product lines fueled the record revenue. The client segment, which includes Ryzen 9000 desktop CPUs, surged to $2.5 billion — the highest quarterly figure in the company’s history. The gaming segment also impressed, growing by 63% to $1.12 billion, thanks in part to renewed demand in the console market.
However, the positive topline numbers were overshadowed by an operating loss of $134 million. AMD attributes this to the temporary U.S. export ban on its China-customized AI accelerators — the Instinct MI308. This policy led to $800 million in inventory-related write-offs and significantly impacted the company’s gross margin, which dropped to 40%. Without these one-off costs, AMD said the margin would have been closer to 51%.
Net Profit Driven by Tax Credit
In contrast to the operating loss, AMD reported a net income of $872 million, more than triple compared to the same quarter last year. This boost was primarily due to an $834 million tax credit. Operational cash flow also saw a significant jump, rising from $593 million in Q2 2024 to more than $2 billion in Q2 2025.
Mixed Segment Performance
While the client and gaming divisions flourished, AMD’s data center segment showed signs of strain. Although it generated $3.24 billion in revenue — a 14% increase year-over-year — this was down from $3.6 billion in the previous quarter, highlighting the effects of the China export ban.
AMD’s embedded segment, largely composed of products from its Xilinx acquisition, saw a slight decline. Revenue fell by 4% to $824 million, and the segment’s operating income dropped 20% to $275 million.
AMD Stock Reaction: Growth Isn’t Enough
Despite the promising revenue growth, the AMD stock (AMD Aktie) took a hit. Investors reacted negatively to the operating loss and ongoing regulatory uncertainties, particularly regarding export restrictions to China. The stock fell nearly 4% in after-hours trading, underscoring investor sensitivity to earnings quality and geopolitical risks.
Outlook for Q3 2025: Optimism with Caveats
Looking ahead, AMD forecasts $8.7 billion in revenue for Q3 2025, representing a 28% year-over-year increase. However, the company clarified that this projection does not include any revenue from MI308 accelerator sales to China, as export licenses are still pending approval from U.S. regulators.
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