AMD stock slumps 5% on earnings miss, China AI chip concerns
The Santa Clara, California-based company reported adjusted earnings of 48 cents per share, falling short of the 49 cents per share expected by analysts polled by LSEG.
CEO Lisa Su singled out the hit from U.S. controls on artificial intelligence chips in a call with analysts.
"AI business revenue declined year over year as U.S. export restrictions effectively eliminated MI308 sales to China, and we began transitioning to our next generation," Su said.
For the current quarter, AMD forecasted $8.7 billion in revenue, plus or minus $300 million, versus $8.3 billion expected by analysts. The company said its guidance does not account for revenue from its MI308 AI chip designed for the China market to work around chip restrictions.
During an interview with CNBC's "Squawk on the Street" on Wednesday, Su said the company has been working closely with the Trump administration on license requirements necessary to ship its chips to China, but took a "prudent" approach to its guide.
"From our standpoint, we think we have an extremely strong portfolio," she said. "Tens of billions of dollars is the opportunity in a market that's going to be, let's call it 500 billion plus over the next few years."
Earlier this year, AMD said it would take a $800 million hit during the second quarter as a result of chip restrictions. AMD said in July it plans to soon resume those shipments as the Department of Commerce gets set to restart application review.
Some Wall Street analysts raised concerns over how soon those shipments may begin. Analysts at Morgan Stanley called the timing of the restart in China shipments "vague," adding that the company requires a "near terms upside in GPU" to keep its premium.
"China upside sounds like it will take time to materialize (and it sounded like we shouldn't count too much on it even if licenses are granted), pull-forward and inventory risks remain, and opex continues to march higher which is limiting earnings leverage," wrote Bernstein analysts.
Investors also raised concerns about the company's datacenter business, which grew 14% to $3.2 billion and includes its central processors and graphics processing units.
"We are more guarded on the company's ability to drive significant scale in Datacenter GPUs over time, and think operating leverage is likely to be hampered by the significant OpEx we believe is needed for the company to support its software and systems efforts tied to datacenters," wrote analysts at Goldman Sachs.
Su said Wednesday the company is seeing strong forecasts for compute from some of its largest customers and anticipates an "inflection point" into the third quarter.
"The data center business is actually the main driver of our growth, and we look at that as the opportunity in front of us," she added.
Despite the post-earnings move, AMD's revenues grew 32% from a year ago to $7.69 billion and topped a $7.42 billion estimate from analysts polled by LSEG. Net income jumped to $872 million, or 54 cents per share, up from $265 million, or 16 cents per share in the year-ago period.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fox News
30 minutes ago
- Fox News
Mid-decade redistricting is ‘blatantly political,' GOP lawmaker argues
Rep. Jay Obernolte, R-Calif., discusses the impeding re-districting battle across the U.S., Google's investments in AI and potential nuclear reactors on the moon on 'Fox News Live.'
Yahoo
36 minutes ago
- Yahoo
Brawls, racism and cocaine: Lawsuit reveals life inside Tesla plant where Musk was directly involved with HR decisions
Working conditions at Tesla's manufacturing plant in Fremont, California, have allegedly gone from bad to worse, with sexual assaults aboard company shuttle buses, drug and alcohol use onsite, all-out brawls breaking out between employees and 'prevalent' bigotry – including widespread use of the N-word, a bombshell lawsuit reveals. In a 159-page federal lawsuit filed Thursday and obtained first by The Independent, Ozell Murray, a former Fresno police officer in charge of security at the 22,000-person factory, claims he and his team 'routinely' seized cocaine and fentanyl onsite, confiscated guns discovered in the building, investigated 'acts of sexual deviance' on Tesla grounds, and, at regular intervals, 'pulled employees off the manufacturing line and sent them home for being alcohol-intoxicated and high on drugs.' Those who reported the issues were fired over bogus charges or forced to resign, according to Murray's complaint, to which several of his ex-colleagues signed on as co-defendants. 'Healthy profits have always been more important to the Company than a healthy working environment,' the complaint alleges. 'For Tesla, more bodies on the manufacturing line meant more vehicles flying out the factory door – no matter how unclean the hands were that were assembling those cars.' Tesla's Model Y, Model S, Model 3 and Model X lines are manufactured in Fremont. The U.S. Equal Employment Opportunity Commission sued Tesla in 2023 over allegations of unbridled racism at its Fremont plant. This spring, Tesla settled a lawsuit brought by a Black employee at the Fremont facility who accused a manager of greeting her by saying, 'Welcome to the plantation,' and, 'Welcome to the slave house.' A Tesla spokesperson did not respond on Friday to a request for comment. The complaint against Tesla, which was brought by Murray and former Tesla HR execs Linda Peloquin, Adam Chow, Tiara Paulino, Sharnique Martin and Gregory Vass, says Tesla CEO, and erstwhile presidential 'First Buddy.' Elon Musk – presently America's least-likable public figure, according to Gallup – was personally involved in many of the Fremont factory's hiring and firing decisions. 'Musk was a frequent visitor to the facility—and not just for high-level photo opportunities, but to take a hands-on approach to managing, directing, and facilitating resolution of the manufacturing and workforce issues at the plant,' the complaint states. 'Musk would frequently visit the plant and conduct issue-resolution meetings with actual line employees, not just upper management bureaucrats. Musk would hold – meetings with line-level employees from every function of the plant – from the manufacturing line to operations to HR – and issue directives right then and there to resolve the issues employees raised.' The complaint goes on to describe a significant portion of the carmaker's 'hastily-hired and poorly-vetted' workforce in Fremont as 'blatant racists and misogynists.' 'Many who have worked there have likened the workplace to the Jim Crow South; an environment in which Black employees and brown-skinned workers are besieged with constant racial abuse, stereotyping, and hostility – including with repeated use of inarguably the most brutal and degrading racial slur in the history of humanity: N****r,' according to the complaint. '... Black Tesla employees have reported regularly encountering nooses on desks and other equipment as well as seeing the word 'N****r' graffitied on walls, in bathroom stalls, elevators – even on new Tesla vehicles rolling off the production line.' The complaint filed by Murray and his former coworkers alleges that the 'use of the 'N-word' was prevalent' at Fremont. In late 2021, one of Murray's direct reports, a Black security officer who was also a former cop, 'was victimized when a Tesla employee called her a n****r,' the complaint states. 'Murray's colleague was so distressed by the incident and the impunity with which the word was used toward her… that she had to take a medical leave from work to recover from the trauma,' according to the complaint. 'Yet, instead of offering encouragement, Murray's supervisor… counseled him that Murray should be informing all new Black security personnel that the use of the 'N-word' was simply engrained [sic] in the culture at Tesla and, so, Murray should only be bringing aboard that are willing to accept and acquiesce to the prevalence of that word in the workplace.' In another incident indicative of the 'racial tension and toxicity' at Tesla's Fremont plant, the complaint says a Black assembly-line employee working on a vehicle called out a warning after he spotted a coworker about to do something that could potentially damage the car. According to the complaint, the coworker, who was white, 'responded by angrily yelling back, 'Do you want to hang by a tree?'' Supervisors were also known to abuse Tesla's 'zero tolerance' policy at the time for drug and alcohol use on the job, the complaint goes on. It says that if a higher-up suspected an employee was under the influence, they could report the person to security and Murray or someone from his team would then escort them off the premises 'without question.' However, in 'many instances,' the supposedly intoxicated employee did not appear that way to the security officer tasked with removing them, according to the complaint. 'As it turned out, many supervisors and managers were merely using the policy as a means to retaliate against their subordinates – and, in particular, when a line employee had turned down the supervisor or manager's sexual advances,' the complaint states. 'Or, when the manager or supervisor wanted to retaliate against someone because of their race or ethnicity. Or, when the manager or supervisor wanted to retaliate against someone because of a complaint an employee had lodged against them.' Yet, the complaint claims incidents such as these were swept under the rug by one specific Tesla manager who had 'an irrational fixation on fostering the delusion that the environment and culture at Tesla is one of tolerance and innovation, rather than racism and retaliation.' Because of sky-high demand for Tesla vehicles at the time, if a violent or racist Tesla employee were to actually get fired for cause, they were regularly 'loopholed' back in via a temp agency, according to the complaint. This, the filing says, allowed them to bypass the usual background check, and 'oftentimes' meant an employee who had been previously victimized 'had to actually resume working with their attacker and tormentor.' One loopholed employee who had been let go for workplace violence returned to Fremont and promptly attacked another colleague, the complaint states. For his part, the complaint says Murray 'was outspoken' with Tesla management about safety and security concerns in Fremont. For that, he wound up 'summarily fired under the pretextual guise of 'poor performance,'' even though he had never once been disciplined and was promoted five times in his six years with Tesla. Murray's co-defendants all endured similar experiences, being drummed off the payroll for supposed 'poor performance,' according to the complaint. Each of them had brought up serious concerns about issues at Tesla, or had investigated and substantiated employee wrongdoing, and were subsequently 'outright fired' for doing so, or resigned before they could be terminated, the complaint alleges. None had ever received any negative performance reviews, according to the complaint. Murray and his co-defendants are suing Tesla on five causes of action, including retaliation, wrongful termination and failure to prevent unlawful discrimination. They are seeking compensatory damages, emotional distress damages, punitive damages and exemplary damages to be determined by a jury, plus attorneys' fees and court costs.
Yahoo
41 minutes ago
- Yahoo
SoundHound's Post-Q2 Rally Explained: Should You Buy SOUN Stock Now?
Shares of SoundHound AI (SOUN) staged a sharp rebound after the company delivered a blowout second quarter, setting a new revenue record and lifting its full-year outlook. SOUN stock surged more than 27% in morning today after the results were announced, as investors cheered the company's accelerating momentum in the fast-growing conversational and voice AI market. The rally comes after a turbulent stretch for the stock. From a high of $24.98, SOUN endured a steep decline amid mounting concerns about its high valuations and broader economic headwinds. Selling pressure intensified in the months leading up to the Q2 release, leaving the stock deep in the red on a year-to-date basis. Despite the selloff, SoundHound's business fundamentals have remained strong, with demand for its AI technology continuing to expand across multiple industries. More News from Barchart Robinhood Stock Seemingly Can't Be Stopped in 2025. Is It Too Late to Buy HOOD Here? Dear Ford Stock Fans, Mark Your Calendar for August 11 Cathie Wood Is Buying Shares of This Little-Known Ethereum Treasury Company. Should You? Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. The first quarter of 2025 had already hinted at the company's growth potential, with revenue climbing 151% year-over-year to $29.1 million. That performance had surpassed even the impressive 101% year-over-year growth registered in Q4 2024. But Q2 took things to another level. The company reported $42.7 million in revenue, a staggering 217% increase from last year's second quarter. This was driven by a growing addressable market, the addition of new customers, and successful cross-selling initiatives. Such explosive top-line growth reflects the surging demand for its voice AI solutions. As businesses in sectors ranging from automotive to hospitality seek to integrate conversational AI into their customer interactions, SoundHound's technology is gaining traction. This broadening adoption solidifies its leadership position in the space and sets the stage for sustained revenue expansion. SoundHound's Expansion Gains Speed SoundHound is firing on all cylinders, with growth momentum building quarter after quarter, with no signs of slowing down. The company has been making significant inroads across its key business segments, including automotive, AI-powered enterprise customer service, and AI-driven automation for restaurants. In the second quarter, it crossed a significant milestone, processing more than 1 billion queries per month on its platform, underscoring the scale and adoption of its technology. The rollout of its Agentic AI platform is emerging as the new growth catalyst for the company. This innovation has provided a tailwind across the business, bolstered by strategic channel investments that are beginning to pay off. Expanded enterprise partnerships and deeper engagement with existing partners have contributed meaningfully to results, positioning the company for continued expansion. In automotive, SoundHound signed a new original equipment manufacturer (OEM) in China, while enjoying a double-digit lift in average selling prices thanks to broader integration of its generative AI solutions. Its restaurant business is also performing exceptionally well, with location deployments accelerating quarter-over-quarter. The company now powers more than 14,000 restaurant locations with its Voice AI ordering technology, an increase of 1,000 locations in Q2 alone. Diversification has been another bright spot. During the first half of the year, no single customer accounted for more than 10% of total revenue, reducing concentration risk and creating a more stable growth foundation. Q2 also benefited from strong close rates on major deals, a trend that could sustain in future quarters. Thanks to the strong demand, SoundHound raised its 2025 revenue outlook to $160 million to $178 million from $157 million to $177 million. Recent acquisitions have strengthened both its capabilities and customer base, accelerating growth and creating new opportunities. While expansion has been rapid, SoundHound is keeping a close eye on costs. Management is pursuing operational efficiency through cloud integrations and workforce optimization, with generative AI playing a key role in enhancing productivity. With profitability in sight, the company remains confident in its path toward achieving adjusted EBITDA profitability by the end of 2025. The Bottom Line on SoundHound Stock SoundHound's Q2 results showcased explosive revenue growth, expanding market adoption, and a path toward profitability. With diversified revenue streams, strategic partnerships, and its agentic AI platform gaining traction, the company is positioned for sustained momentum. Analysts label SOUN stock a 'Moderate Buy.' Still, if SoundHound maintains this growth trajectory and edges closer to profitability, the current rally could be more than just a short-term rebound. On the date of publication, Amit Singh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
