Analyst(s): Olivier Blanchard, Daniel Newman
Publication Date: August 7, 2025
AMD’s Q2 FY 2025 earnings report highlights how record CPU sales helped offset headwinds from export restrictions on Instinct GPUs to China. While revenue rose on strong Client and Data Center momentum, profit declined due to inventory-related charges. The outlook hinges on the MI350 ramp and China license approvals.
What is Covered in this Article:
- AMD’s Q2 FY 2025 financial results
- MI355 ramp gains traction; China export licenses remain a major overhang
- EPYC extends cloud and enterprise lead with 33rd straight quarter of share gains
- Gaming and Client segments deliver an all-time high revenue on new launches
- MI400 and Helios position AMD to compete head-on in large AI clusters
- Q3 FY 2025 outlook hinges on MI355 execution, margin recovery, and China clarity
The News: Advanced Micro Devices, Inc. (NASDAQ: AMD) reported Q2 FY 2025 revenue of $7.7 billion (+3.6% above consensus estimates), up 32% year-on-year (YoY). Data Center revenue rose 14% YoY to $3.2 billion, supported by robust EPYC CPU sales, which offset export-control-related headwinds to Instinct MI308 shipments. Client and Gaming revenue surged 69% YoY to $3.6 billion, with Client revenue at a record $2.5 billion (+67% YoY) and Gaming revenue up 73% YoY to $1.1 billion. Embedded revenue declined 4% YoY to $824 million. Non-GAAP gross profit increased 7% YoY to $3.3 billion, with gross margin at 43% (Q2 FY 2024: 53%). Non-GAAP operating income fell 29% YoY to $897 million (at par with consensus), and the corresponding margin fell to 12%, down 10 percentage points (pts) YoY. Non-GAAP net income dropped 31% YoY to $781 million (-2.5% below consensus), while non-GAAP diluted earnings per share (EPS) stood at $0.48, down 30% YoY and was 2.3% below street estimates.
“We delivered strong revenue growth in the second quarter, led by record server and PC processor sales,” said Dr. Lisa Su, Chair and CEO of AMD. “We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains.”
AMD Q2 FY 2025 Sales Beat Offset by MI308-Linked EPS Decline
Analyst Take: AMD’s Q2 FY 2025 results delivered a solid revenue beat, driven by record client and server CPU sales, but earnings declined on the back of export-control-related charges tied to Instinct MI308 GPUs. (Profitability compression, driven by an $800 million inventory charge, cut non-GAAP gross margin by 10 pts YoY to 43%, highlighting the near-term pressure from regulatory dynamics.) While AMD reaffirmed its path to scaling the AI business into a multi-billion-dollar opportunity, investors seem focused on the pace of MI355 adoption, the rollout of MI400, and China license approvals.
Instinct MI355 Ramp Emerges as Key Growth Lever Amid China Constraints
AMD confirmed a strong H2 FY 2025 ramp for its MI350 series, with MI355X volume production beginning ahead of schedule in June. Despite MI308 being excluded from Q3 guidance (due to pending license approvals), management expects AI GPU revenue to grow sequentially, powered by initial MI355 deployments at hyperscalers and AI-native cloud providers.
This next part is key: The company cites up to 40% better token-per-dollar performance with MI355 compared to NVIDIA’s GB200, along with additional TCO advantages. With data centers looking for ways to improve ROI and lower TCO, AMD is taking a compelling competitive story to the market. Case in point: Oracle’s 27,000+ node AI cluster combining MI355X, 5th Gen EPYC Turin CPUs, and Pollara SmartNICs signals early adoption at scale.
AMD’s developer cloud, ROCm 7 stack upgrades, and support for frontier models like Llama 4 and Gemma 3 further improve platform stickiness, but MI355’s ability to offset MI308’s absence will remain under close watch.
EPYC CPUs Continue to Gain Share in Cloud, Enterprise, and Telecom
The Data Center segment delivered 14% YoY growth, with record EPYC CPU sales across both cloud and enterprise. Perhaps more significant is this trend line: AMD reported its 33rd consecutive quarter of YoY share gains, with over 100 new cloud instances launched, including next-gen Turin deployments at Oracle and Google.
Cloud adoption accelerated across hyperscalers as EPYC-powered instances expanded globally, while enterprise on-prem momentum benefited from 28 new Turin platforms by Dell, HPE, Lenovo, and Supermicro. Key wins spanned verticals like aerospace, financial services, streaming, and telecom, with KDDI adopting EPYC for its 5G virtualized network and Nokia selecting EPYC for its cloud platform used to build and manage core network functions.
AMD also launched the cost-optimized EPYC 4005 Series to target SMB and hosted service providers. Despite export-related GPU softness, this CPU traction helped offset GPU headwinds in Q2, with AMD highlighting sustained share gains in both cloud and enterprise.
Client and Gaming Segments Delivered Record Revenue on Richer Mix
Client and Gaming revenue rose 69% YoY, led by record Ryzen CPU sales and strong gaming demand. AMD’s Ryzen 9000 desktop processors and X3D variants continue to drive demand, topping global bestseller charts.
From a competitive standpoint, it is important to highlight why this is happening: Part of the reason for this success is AMD’s 3D V-Cache technology, which stacks a significant amount of L3 cache directly on top of the CPU cores. This allows the processor to store and access game data much faster than it could from system RAM. This especially results in a noticeable boost to frame rates for a smoother, more consistent, and predictable gaming experience in cache-sensitive games. AMD’s Zen 5 architecture also delivers better instructions per cycle (IPC) performance and overall efficiency. Thirdly, AMD has a history of supporting its platforms for extended timeframes. In this instance, AMD’s commitment to support the AM5 socket for several generations means that a gamer who buys a Ryzen 9000 series CPU today can expect to have the ability to upgrade to a future-generation processor without having to replace their entire motherboard.
AMD also noted strong demand for Radeon 9000 series GPUs, with desktop GPU sell-through outpacing supply. Highlighting the launch of the Radeon 9600 XT during the quarter. Based on RDNA 4 architecture, the 9600 XT is equipped with dedicated hardware focused on AI acceleration. (Useful for tasks like AI-powered upscaling, generative textures, and other real-time effects. This is useful for both gaming and creative and other AI-enabled workflows.) Note that RDNA 4 architecture doubles the GPU’s ray tracing throughput compared to the previous generation, meaning the 9600 XT can deliver more realistic lighting and shadows with almost no discernible performance loss. It also supports the latest PCIe 5.0 standard, providing up to 128 GB/s of bandwidth – a significant data transfer speed advantage. Lastly, the Radeon 9600 XT comes in 8GB and 16GB of GDDR6 memory configurations, which addresses the needs of both budget-conscious buyers and users needing a higher-VRAM option for creative work, using high-resolution textures, or concerned about future-proofing their system.
Commercial PC momentum improved during the quarter, with AMD’s share expanding at Dell, Lenovo, and HP. (Enterprise notebook sell-through is up over 25% YoY.) While we can attribute some of this share expansion to limited CPU options from Intel in critical price points for AI-enabled X86 PCs, AMD’s processors do deliver a number of advantages over Intel, like better multithread performance and price points. For instance, the newly launched Radeon AI Pro R9700 GPU extends AMD’s AI push into desktop inference and creative workloads. Together, these product launches, design wins, and platform expansions signal AMD’s growing competitiveness across both consumer and commercial PC markets. That being said, AMD’s share expansion in the X86 client ecosystem could slow later this year, when Intel releases its next generation of AI-capable PC processors.
Also worthy of note is that semi-custom revenue looks to have rebounded well with console inventories normalizing. New multi-year chip deals with Microsoft and co-engineering programs like Sony’s Project Amethyst expand AMD’s semi-custom gaming footprint.
MI400 and Helios Poised to Anchor Next AI Wave
AMD reiterated that MI400 Series development is progressing well, targeting launch in FY 2026 with strong early interest in large-scale deployments. Helios, AMD’s rack-scale AI platform powered by MI400 GPUs and EPYC CPUs, is designed for the most demanding workloads and is expected to deliver up to 10x generational performance uplift. With each rack connecting up to 72 GPUs that can operate as a single AI accelerator, AMD positions Helios as a competitive full-stack alternative in large training and inference clusters. The company has integrated ZT Systems’ rack and design team to accelerate Helios platform readiness and optimize customer co-development. While MI400 revenue is not expected before FY 2026, AMD’s focus on full-stack offerings sets a foundation for competing more aggressively with NVIDIA in future training workloads.
Guidance and Final Thoughts: China Licenses Remain the Wildcard
AMD guided Q3 FY 2025 revenue to approximately $8.7 billion, implying 28% YoY and 13% sequential growth, supported by double-digit gains in Data Center and Client.
Gross margin is expected to recover to ~54% as the MI355 ramp scales. However, the outlook excludes any MI308 shipments to China as licenses remain under review. Management stated that most MI308 inventory is still in WIP form and will take time to convert into revenue once approved.
While AMD did well overall, expectations around its AI Datacenter business remain elevated – especially with the upcoming inference inflection expected to drive a significant ramp in Instinct GPU demand. Meanwhile, investors will likely remain focused on MI355 execution, clarity on China licenses, and sustained margin recovery.
See the complete press release on AMD’s Q2 FY 2025 results on the AMD investor website.
Disclosure: Futurum is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum as a whole.
Other insights from Futurum:
AMD Q1 FY 2025 Financial Results Highlight AI-Led Growth Across Core Segments
AI PCs, Ryzen, and the Next Frontier in Personal Computing – Six Five On The Road
AMD Expands Telecom Role as Nokia Selects EPYC for 5G Cloud Platform
Author Information
Olivier Blanchard is Research Director, Intelligent Devices. He covers edge semiconductors and intelligent AI-capable devices for Futurum. In addition to having co-authored several books about digital transformation and AI with Futurum Group CEO Daniel Newman, Blanchard brings considerable experience demystifying new and emerging technologies, advising clients on how best to future-proof their organizations, and helping maximize the positive impacts of technology disruption while mitigating their potentially negative effects. Follow his extended analysis on X and LinkedIn.
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
