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AMD Data Center Revenue Disappoints, Shares Drop About 4%

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Advanced Micro Devices (AMD.O) reported weaker-than-expected data center revenue in its second quarter, disappointing investors betting on the company’s AI chip growth potential. Shares of the Santa Clara-based chipmaker fell roughly 4% in extended trading.

While AMD’s stock has climbed over 40% this year—outperforming the chip index’s 12% gain—its data center segment growth lagged behind rival Nvidia (NVDA.O), the dominant player in AI chips. Nvidia’s data center revenue surged 73% to $39.11 billion in its fiscal first quarter, driven by demand for its Blackwell GPUs and networking hardware.

AMD’s second-quarter data center revenue grew 14% to $3.2 billion, close to analysts’ estimate of $3.22 billion. This segment includes both server CPUs and Instinct AI chips. Portfolio manager Dan Morgan from Synovus Trust noted the “lackluster” data center results were concerning given AMD’s reliance on this segment.

CEO Lisa Su said the decline in AI chip revenue year-over-year was due to U.S. export restrictions on shipments to China and the transition to next-gen MI350 AI chips. Production of the MI350 series began ahead of schedule in June, with a planned steep production ramp in the second half of the year.

AMD also revealed that shipments of its MI308 AI chips to China remain on hold pending U.S. government export license approvals, impacting revenue. The company expects to resume shipments once licenses are granted. These export curbs are estimated to reduce AMD’s 2025 revenue by about $1.5 billion, mainly affecting Q2 and Q3.

For Q3, AMD forecast revenue of approximately $8.7 billion (±$300 million), above analyst expectations of $8.3 billion. The company projected adjusted gross margins around 54%, in line with estimates.

Adjusted earnings per share for Q2 were 48 cents on revenue of $7.69 billion, excluding stock-based compensation and other items.

China Slams U.S. for ‘Abusing’ Export Controls Over Huawei AI Chip Guidance

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China has sharply criticized the United States for what it called the “abuse of export control measures”, following new U.S. guidance warning companies against using Huawei’s Ascend AI chips. The Chinese Ministry of Commerce said the move threatens the stability of global semiconductor supply chains and vowed to take action to protect the rights of its domestic companies.

At a press conference on Thursday, Commerce Ministry spokesperson He Yongqian urged Washington to “correct its practices” and accused the U.S. of targeting Chinese tech firms unfairly.

Background:

  • On Tuesday, the U.S. Commerce Department’s Bureau of Industry and Security (BIS) issued new guidance stating that companies using Huawei’s Ascend chips—the firm’s most advanced AI semiconductors—risk violating U.S. export controls.

  • These chips are produced by Huawei, a Shenzhen-based tech giant already subject to sweeping U.S. restrictions, and are seen as direct competitors to products from American chipmakers like Nvidia in the Chinese AI market.

China’s Reaction:

The Chinese government views the BIS warning as a deliberate attempt to suppress China’s tech advancement and influence in artificial intelligence. The Ministry emphasized that it will take “necessary measures” to safeguard the legitimate interests of Chinese enterprises.

The dispute underscores growing U.S.–China tensions over semiconductor technology and AI dominance, with Washington seeking to restrict China’s access to critical hardware and Beijing accusing the U.S. of weaponizing trade rules to stifle competition.

This development also comes as the global tech industry becomes increasingly fragmented, with countries pursuing “chip sovereignty” strategies to reduce reliance on foreign suppliers.

Intel Seeks Billions for Minority Stake in Altera Business, Sources Say

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Intel is reportedly exploring the sale of a minority stake in its Altera business, aiming to raise several billion dollars in much-needed cash as it seeks to stabilize its financial position. According to sources familiar with the discussions, Intel is pursuing a deal that values Altera at around $17 billion, close to the $16.7 billion it paid to acquire the company in 2015.

This potential sale marks a significant strategic shift for Intel, especially since CEO Pat Gelsinger had recently stated that Altera was considered a core part of the company’s future. However, after experiencing a sharp decline in stock price and a prolonged period of losing market share, Intel has been forced to consider dramatic actions to turn things around.

The company has approached private equity firms and other strategic investors about a possible stake in Altera, with some investors being offered the opportunity to acquire a majority interest, according to the sources. Intel’s representatives have declined to comment on the reports.

Intel had previously hinted at plans to monetize the Altera unit through an initial public offering (IPO), potentially in 2026. However, these recent developments suggest that the company may accelerate those plans in order to raise capital more quickly. A sale of this magnitude could provide Intel with the resources to focus on its broader ambitions, particularly in semiconductor manufacturing, and demonstrate to investors that it can remain competitive as an independent entity.

The potential sale comes amid heightened competition within the semiconductor industry. Rival companies such as Qualcomm have reportedly expressed interest in acquiring Intel, although such a deal would likely face significant regulatory scrutiny and could reshape the landscape of the semiconductor market.

Intel has faced numerous challenges in recent years, including a 50% drop in its stock price this year alone. The company has struggled to keep pace with competitors like Nvidia, which has gained significant ground in the artificial intelligence (AI) chip market, and Advanced Micro Devices (AMD), which continues to erode Intel’s market share in both the PC and data center sectors.

As Intel seeks to reestablish its position in the industry, the potential sale of a stake in Altera could represent a pivotal move in its broader recovery strategy.