AMD Stock Earnings Review: Can AI Chip Demand Continue to Drive Growth?
Advanced Micro Devices announced strong Q1 results, but chip curbs could weigh on the stock.
Key Takeaways
AMD could book a $1.5bn charge in FY 2025 as a result of the US export restrictions imposed on products to China.
The chipmaker delivered a robust set of results on May 6 that surprised to the upside, with revenue boosted by data center GPU demand.
The company is set to debut the MI350 AI GPU in 2025, capable of up to 35 times the inference performance of its predecessor.
Santa Clara, California-based Advanced Micro Devices [AMD] is the second-biggest provider of artificial intelligence (AI) graphic processor units (GPUs) in the world.
This piece will unpack AMD’s Q1 2025 earnings, reported on May 6, as well as how the chipmaker is being affected by US export restrictions and what impact this could have on sales of its AI chips in the near term.
According to research published by IoT Analytics in March, AMD has an approximately 4% share of the data center GPU market. As shown in the pie chart below, this is dwarfed by Nvidia [NVDA], which controls 92% of the market.[1] Intel [INTC] has a share of less than 1%.
AMD Sees $800m Hit from Export Curbs
On April 16, AMD announced in a filing with the US Securities and Exchange Commission that it could book an $800m charge as a result of the restrictions imposed on the export of products to China.[2] Its MI308 chips would likely be affected, the chipmaker said.
It added that it will apply for licenses to avoid taking such a hit, “but there is no assurance that licenses will be granted”.
China was AMD’s second-biggest market in 2024, bringing in approximately a quarter of total revenue of $25.79bn.[3]
AMD Stock Crumbles Amid License Uncertainty
The uncertainty around whether AMD will be granted export licenses for its AI chips — and the broader turbulence caused by US President Donald Trump’s tariffs — has seen the AMD share price fall 18.35% since January to $98.62 at the closing bell on May 6, just before it delivered its Q1 earnings. It recorded a marginal 1.76% increase following earnings, and is down 35.58% in the 12 months to May 7.
AMD stock recorded a 52-week low of $76.48 on April 8, a sharp decline from its 52-week high of $187.28, set on July 10, 2024.
AMD Beats Q1 Expectations
The chipmaker delivered a robust set of results on May 6 that surprised to the upside.[4]
Adjusted earnings per share came in at $0.96 versus the analyst forecast of $0.94. Revenue of $7.44bn was significantly higher than the $7.13bn analysts had been expecting.[5]
Sales of its gaming chips declined 30% year-over-year to $647m, but this was offset by a 57% jump in its data center segment to $3.7bn, driven by continued demand for its AI chips. Total revenue was up 36% year-over-year.
AMD CEO Lisa Su said on the earnings call[6] that these chips are becoming a popular choice for AI inference: “The depth and breadth of our customer engagements continues to expand as breakthroughs in large-scale AI models like OpenAI’s o3 and DeepSeek R1 drive increased demand for traditional inferencing.”
Total revenue for Q2 is expected to be approximately $7.4bn, give or take $300m. This would represent a 27.59% increase on Q2 2024’s revenue at the midway point.
Nvidia does not report its results for Q1 2026 until the end of May, but the ‘king of AI chips’ has already warned that it will see a $5.5bn charge because the Trump administration’s export restrictions will impact sales of its H20 chips.[7]
Intel has not booked any charge, but the company told clients in April that it will need a license to export its Gaudi series chips to China, according to the Financial Times.[8]
Here is how the current fundamentals of AMD, Nvidia and Intel compare.
AMD has a long way to go to catch up to Nvidia in the AI chip market, but right now, AMD stock could represent a more attractive and undervalued opportunity compared to NVDA stock.
INTC stock’s projected weak revenue growth over the next couple of years reflects Intel’s struggle to compete in the AI chip race.
AMD Stock: The Investment Case
The Bull Case for AMD
There are a range of macro and regulatory headwinds facing AMD, but Su is confident that the chipmaker is in a strong position to withstand them.
“We absolutely believe the data center GPU will grow, and we think it will grow strong double digits,” she said on the Q1 earnings call. Growth in AI infrastructure is likely to be “second half-weighted”.
The main catalyst should be the debut of the MI350 AI GPU, which at Computex last June the company claimed is capable of up to 35 times the inference performance of its predecessor.[9]
Su said on the earnings call that “customer interest has been very high”.
The Bear Case for AMD
While AMD’s Q1 earnings seemed like a stellar set of numbers, the Q2 guidance mentioned above includes a $700m revenue reduction caused by the export restrictions.
Another $800m in revenue lost to unrealized sales of its MI308 chips is expected to be reflected in Q3’s numbers, though “very little in Q4”, Su said on the Q1 earnings call.
Conclusion
Demand for AMD’s AI chips remains sound, as shown in the strong revenue growth in its data center segment in Q1. However, sales are expected to take a $1.5bn hit this year due to US chip curbs, which could weigh on AMD stock in the near term.
This is for informational purposes only. OPTO Markets does not recommend any specific securities or investment strategies. Investing involves risk and investments may lose value, including the loss of principal. Past performance does not guarantee future results.
[1] https://iot-analytics.com/leading-generative-ai-companies/
[2] https://ir.amd.com/financial-information/sec-filings/content/0000002488-25-000039/amd-20250415.htm
[3] https://ir.amd.com/financial-information/sec-filings/content/0000002488-25-000012/amd-20241228.htm
[4] https://ir.amd.com/news-events/press-releases/detail/1247/amd-reports-first-quarter-2025-financial-results
[5] https://www.cnbc.com/2025/05/06/amd-earnings-report-q1-2025-.html
[6] https://www.marketscreener.com/quote/stock/AMD-ADVANCED-MICRO-DEVICE-19475876/news/Transcript-Advanced-Micro-Devices-Inc-Q1-2025-Earnings-Call-May-06-2025-49847742/
[7] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/9e6e2d94-83a7-465c-8a94-982d82e3e9e7.pdf
[8] https://www.reuters.com/technology/intel-will-need-license-export-ai-chips-chinese-clients-ft-reports-2025-04-16/
[9] https://www.reuters.com/technology/amd-launches-new-ai-chips-take-leader-nvidia-2024-06-03/