AMD forecasts revenue above estimates, despite US curbs on China chip exports
The optimistic forecast from AMD could help reinforce investor confidence in its ability to compete against Nvidia, after concerns around a trailing position in the lucrative AI market had sent its shares down more than 17 per cent this year.
Like AMD, Nvidia has also warned Wall Street that it will now need an export license to China for a chip tuned to comply with a raft of restrictions imposed by the US Nvidia faces a US$5.5 billion charge as a result, the company said in a securities filing.
In spite of mounting tensions in the US-China trade war, demand remains robust for AMD's advanced processors that power complex AI systems for Microsoft, Meta Platforms and other customers, with cloud giants reinforcing hefty spending plans for building AI infrastructure.
Shares of Santa Clara, California-based AMD were up 4.2 per cent in extended trading. Due to an US$800 million charge from new US curbs on chip exports to China, AMD forecast adjusted gross margin of 43 per cent, which represents an 11 percentage-point drop excluding the charge.
The company expects revenue of about US$7.4 billion for the second quarter, plus or minus US$300 million, compared with analysts' average estimate of US$7.25 billion, according to data compiled by LSEG.
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The better-than-expected forecast is a result of frenzied customer buying in order to stockpile inventory ahead of US tariffs, according to Summit Insights analyst Kinngai Chan.
In February, the company steered away from a longstanding practice of giving a specific sales forecast for its AI chips, but CEO Lisa Su had said AMD expects 'tens of billions' of dollars in sales 'in the next couple of years.'
AMD reported data centre sales jumped 57 per cent to US$3.7 billion, which topped estimates of US$3.62 billion. The company includes much of its AI hardware in its data centre segment.
Chip maker Marvell Technology and server maker Super Micro both disappointed investors on Tuesday afternoon. Marvell pushed back a planned Investor Day until calendar 2026, citing the uncertain economy, and Super Micro trimmed its 2025 revenue forecast, adding to concerns about its position in the AI market. Marvell shares dropped 6 per cent after hours and Super Micro fell 4 per cent.
According to Bob O'Donnell, chief analyst of Technalysis Research, AMD continues to gain share in AI data centre chips, which include its central processing units (CPUs), which do not receive as much attention as graphics processing units (GPUs) used for AI.
The company reported first-quarter net profit of 96 cents a share, adjusted for stock compensation among other things. Analysts had expected adjusted earnings of 94 cents a share.
Revenue jumped 36 per cent to US$7.44 billion, beating estimates of US$7.13 billion.
'We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter driven by strength in our core businesses and expanding data centre and AI momentum,' Su said. REUTERS
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