Mixed Performance: Record Revenue Overshadowed by Data Center Struggles
AMD reported record company-wide revenue of $7.7 billion for the second quarter of 2025, a 32% increase year-over-year. However, the performance of the Data Center segment fell short of expectations, leading to a notable slump in AMD's shares following the announcement[2][3].
Data Center Segment: Revenue Grows, Profits Fall
- Data Center revenue: $3.2 billion, up 14% year-over-year[1][3][4]
- The growth was primarily driven by surging demand for AMD's EPYC™ server processors, with market share gains from both cloud and enterprise customers[1][3][4]
- Despite revenue growth, the segment posted an operating loss of $155 million, reversing from a $743 million profit in the same quarter last year[3]
Export Controls Hit AMD Instinct GPU Business
The disappointing operating income in the Data Center division was largely attributed to U.S. government export controls on the AMD Instinct MI308 GPUs, resulting in roughly $800 million in inventory and related charges[1][2][3]. The company stated that these restrictions hampered their ability to fulfill demand in the Chinese market, directly impacting segment profitability[1][2].
Broader Business Remains Strong
- Client and Gaming segment revenue: $3.6 billion, up 69% year-over-year[2]
- Net income (GAAP): $872 million; earnings per share: $0.54[1][2]
- Non-GAAP gross margin would have been approximately 54% excluding inventory charges from the export controls[1]
AMD also announced the sale of ZT Systems' data center infrastructure business to Sanmina for $3 billion[2], a move aimed at streamlining operations and focusing on high-growth areas.
AI Remains a Key Growth Driver
CEO Dr. Lisa Su emphasized that, despite the short-term setback in the Data Center segment, robust demand across the company's computing and AI portfolio positions AMD for significant growth in the second half of 2025. AMD expects revenue around $8.7 billion for Q3, driven by the ramp-up of its next-generation AMD Instinct MI350 series accelerators and continued strength in EPYC and Ryzen processors[1][2][4].
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