According to CNBC, processor manufacturer Ultramicro (AMD) announced its second quarter financial report for 2025, despite revenue of US$7.69 billion, exceeding the estimated US$7.42 billion. But the earnings per share after a quarter was 48 cents,...
According to CNBC, processor manufacturer Ultramicro (AMD) announced its second quarter financial report for 2025, despite revenue of US$7.69 billion, exceeding the estimated US$7.42 billion. But the earnings per share after a quarter was 48 cents, slightly below market estimates of 49 cents, and after-sales trading stocks fell nearly 5%.
AMD is the second largest supplier in the artificial intelligence (AI) GPU market and is extremely challenging the market leader NVIDIA (Nvidia), and AMD has multiple benefits, providing a solid foundation for growth.
First, AI is developing explosively, and large AI customers such as Meta and OpenAI are further seeking alternatives to NVIDIA's expensive GPUs. Especially in the recommendation stage when AI models are deployed to the public, this makes AMD's AI chips afflicted by these customers. It is worth noting that OpenAI executive director Sam Altman has made it clear that he will use AMD's latest GPU products.
Second, AMD continues to launch new products in the AI chip field, demonstrating its technical strength. The company has announced that it will develop the new AI chip "Instinct MI400" that is expected to be launched in 2026. In addition, AMD's latest AI chip "Instinct MI350" has been certified by executive director Su Zifeng, and is competitive with NVIDIA's GB200 chip in terms of training and recommendation performance. In addition, Su Zifeng also pointed out that among the world's top ten model constructors and AI companies, seven are using AMD's Instinct series chips. AMD is also actively discussing with large customers to build a collection of its AI chips, which shows that its market penetration and cooperation depth in AI ecosystems are continuing to expand.
AMD Data Center department covers CPU and GPU businesses, with the latest financial reporting quarterly revenue of US$3.2 billion, up 14% from the same period of the previous year. Data center CPU demand has increased significantly, playing a key role in GPU AI servers. Su Zifeng explained that the recent cloud capital expenditures have greatly reflected that not only GPU demand, but also visible CPU capital expenditures, which are double benefits to AMD.
Although current AI business revenue has been reduced by product transition period and export restrictions. But AMD executive director Su Zifeng predicts that this quarter's AI investment will achieve growth in the same period of the previous year, which represents the company's confidence in the future of its AI business.
Despite many opportunities, AMD faces challenges that cannot be ignored in the development of AI chips. In the AI GPU market, NVIDIA still accounts for most of the market. As the second largest manufacturer, AMD must overcome its huge leading and superior market share and needs to continue technical innovation and strong promotion strategies.
The US government restricts exports to some AMD's high-level AI chips to China, because of its worries that it may be surpassed by competitors, which directly affects AMD's potential acquisition. U.S. government export restrictions have caused AMD MI308 AI chips to be unable to be sold in China, losing up to $800 million in a single quarter. Although AMD applied for the export license for the Chinese market for MI308 AI chips, financial testing did not include these chip revenues, and the verification results are still inconclusive.
Third, AMD AI business revenue has decreased year by year, partly because the company is in the process of transitioning to next-generation products. The transition period of this product iteration may lead to short-term fluctuations in the business, which will take time to fully realize the market benefits and contributions of new products. As for, export controls not only affect the acquisition, but also AMD's gross profit margin.
Without export control costs, the gross profit margin after adjustment in the second quarter financial report would have reached 54%, but actually 43%, indicating potential profit pressure. Finally, AMD's single-season adjusted EPS was 48 cents, slightly below the market's expected 49 cents. Although the closing exceeded previous expectations, it did not meet market expectations, which affected investors' confidence and reflected the decline in stock prices.
