Advanced Micro Devices (NASDAQ:AMD) posted mixed Q2 results, topping revenue expectations while matching on earnings. Growth in the Data Center segment slowed significantly to 14% year-over-year, largely due to the transition to MI350 chips and reduced sales to China following export restrictions—at least according to management’s explanation. In contrast, Client and Gaming segments delivered strong rebounds after prior softness, with revenue surging 69% year-over-year. Embedded lagged, as expected, but is anticipated to improve in the second half.
Gross margins came in well below the expected 54%, primarily due to an $800 million inventory charge related to MI308 chips originally intended for China. Management stated that margins would have been in line with expectations if not for that charge. While it remains unclear whether further write-downs are expected in Q3, management noted that export license approvals are underway. And more importantly, guidance for Q3 and the full year—already ahead of consensus—does not include any potential China-bound chip sales.
For more details, key highlights, and commentary, check out the high-level earnings summary.
