Core Insights - AMD reported Q2 2025 revenue of $7.685 billion, a 32% year-over-year increase, exceeding analyst expectations [1] - The company's gross margin for Q2 was 40%, with a net income of $872 million [1] - Non-GAAP gross margin was 43%, with operating income of $897 million and net income of $781 million [1] - Trade policies led to $800 million in inventory and related costs, impacting data center business [1] - Excluding these costs, the non-GAAP gross margin would be approximately 54% [1] Business Segment Performance - Data Center segment revenue was $3.2 billion, a 14% year-over-year increase, driven by demand for EPYC processors [2] - Client and Gaming segments generated $3.6 billion in revenue, a 69% year-over-year increase [2] - Client segment revenue was $2.5 billion, up 67%, attributed to the new "Zen 5" architecture [2] - Gaming segment revenue reached $1.1 billion, a 73% increase, due to growth in semi-custom business and demand for Radeon GPUs [2] - Embedded segment revenue was $824 million, a 4% year-over-year decline, due to fluctuating end-market demand [2]

Core Viewpoint - AMD reported a record revenue of nearly $7.685 billion in Q2, maintaining over 30% year-on-year growth, but profit growth turned negative due to U.S. export restrictions on MI308, leading to a 30% decline in EPS and a 10 percentage point drop in gross margin to 43% [1][12][13] Financial Data Summary - Revenue: Q2 revenue was $7.685 billion, up 32% year-on-year, slightly below the Q1 growth of 36% [6][12] - EPS: Non-GAAP diluted EPS for Q2 was $0.48, down 30% year-on-year, compared to a 55% increase in Q1 [6][12] - Profit: Non-GAAP gross margin was 43%, down from 54% in Q1 and 53% a year ago; operating profit decreased by 29% year-on-year [6][12][13] Segment Performance - Data Center: Q2 revenue was $3.2 billion, growing 14% year-on-year, a significant slowdown from Q1's 57% growth [6][14] - Client Segment: Q2 revenue reached $2.5 billion, up 67% year-on-year, marking a third consecutive quarter of record high revenue [7][14] - Gaming: Q2 revenue was $1.1 billion, reversing a 30% decline in Q1 to a 73% increase [8][15] Guidance and Outlook - Q3 Revenue Guidance: Expected revenue is approximately $8.7 billion, with a growth rate slowing to below 30% [10][16] - Gross Margin Guidance: Q3 gross margin is projected to recover to 54% [11][17] - Export Restrictions: Current guidance does not account for any revenue from MI308 exports to China, pending U.S. government approval [18][19] Market Context - AMD's stock price has increased over 40% since the beginning of the year, outperforming competitors like NVIDIA, which saw a 30% increase [3] - Concerns about high valuation pressures on AMD's stock following significant price increases this year [3]