AMD posts Q2 2025 results with record $7.7b revenue

AMD reported a record revenue of US$7.7 billion in Q2 2025, with a 40% gross margin and US$872 million in net income.

The company took a US$800 million charge due to US export controls on its Instinct MI308 GPUs, which dragged down margins.

Excluding the charge, AMD’s non-GAAP gross margin would have been around 54%.

Data Center segment revenue rose 14% year-on-year to US$3.2 billion, driven by demand for EPYC processors.

The Client segment earned US$2.5 billion, up 67% from a year earlier due to strong Ryzen desktop processor sales, while Gaming revenue was US$1.1 billion, up 73% on demand for Radeon GPUs and semi-custom products.

AMD also announced new AI products, collaborations with partners like Meta and OpenAI, and the planned sale of ZT Systems’ data center infrastructure manufacturing business to Sanmina for up to US$3 billion.

For Q3 2025, AMD expects revenue of about US$8.7 billion, excluding any MI308 shipments to China.

🔗 Source: AMD

🧠 Food for thought

1️⃣ Export controls create massive financial volatility for AI chip companies

The $800 million inventory charge AMD took this quarter demonstrates how geopolitical tensions can instantly wipe out significant revenue for semiconductor companies.

This impact extends beyond immediate losses, as AMD’s Q3 forecast excludes any potential China revenue from MI308 shipments. This highlights how export restrictions create ongoing uncertainty rather than one-time hits.

AMD’s China challenges began years earlier when the U.S. added its THATIC joint venture to an entity list in 2019, cutting off a $293 million technology licensing deal that had allowed Chinese companies to develop processors based on AMD’s designs 1.

This demonstrates how quickly regulatory changes can reshape business models, forcing companies like AMD to write off entire market segments and product lines despite strong underlying demand.

2️⃣ AMD’s decade-long transformation from underdog to AI contender is accelerating

AMD’s record revenues reflect a remarkable competitive turnaround that began with its CPU business and now extends to AI accelerators.