AMD shares fall 5% premarket as data center revenue underwhelms

Published 05/08/2025, 22:20
Updated 06/08/2025, 09:16
© Reuters

Investing.com - Shares of Advanced Micro Devices (NASDAQ:AMD) sank by more than 5% in premarket hours trading after the group unveiled underwhelming quarterly revenue at its crucial data center business.

Revenue at the unit, which houses AMD’s all-important artificial intelligence chips that are viewed as central to the company’s future growth, rose 14% to $3.2 billion. Analysts had seen the figure at $3.2 billion, according to LSEG data cited by Reuters.

By comparison, AI-darling Nvidia (NASDAQ:NVDA) -- one of AMD’s closest rivals -- posted a 73% jump in data center revenue to $39.11 billion in its fiscal first quarter earlier this year.

AMD CEO Lisa Su later told investors in a post-earnings call that AI chip revenue had fallen versus a year ago, due largely to U.S. restrictions on semiconductor exports to China and an ongoing transition to its next-generation MI350 chips.

The data center performance and Su’s comments overshadowed a higher-than-projected third-quarter revenue outlook of about $8.7 billion, plus or minus $300 million. Notably, AMD flagged that the guidance excludes revenue from shipments of its MI308 AI chip to China, adding that license applications are currently being reviewed by the U.S. government.

For the three months ended June 29, 2025, AMD posted adjusted diluted earnings per share of $0.48 on revenue of $7.69 billion, compared with analyst expectations for per-share income of $0.48 and revenue of $7.41 billion.

"Our impression is positive," analysts at Daiwa Capital said in a note to clients, adding that "this was a ‘price to perfection quarter’" for AMD after its shares spiked by more than 120% in four months.

Despite the pullback in the shares before the opening bell on Wall Street on Wednesday, "overall, we believe investors will be happy with this earnings report going forward," the analysts said.

(Yasin Ebrahim contributed reporting.)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.