'Nvidia Rival' AMD Turns to a Loss in Q2… Shares Plunge 6% After Hours

Korea Economic Daily

Summary

AMD reported an operating loss for the first time in 10 quarters since Q4 2022, turning to a deficit in Q2.
Due to export restrictions by the U.S. government, AMD suffered an $800 million inventory loss, and along with decreasing AI business revenue, the company’s stock price plunged 6.34% after hours.
AMD forecast Q3 revenue to exceed market expectations, and announced plans to launch its new AI chip 'MI400.'

The U.S. semiconductor company reported an operating loss of $134 million (₩18.61 billion), swinging into the red. This marks AMD’s first operating loss in 10 quarters since Q4 2022.

AMD announced on the 5th (local time) that its Q2 revenue hit $7.68 billion (₩10.656 trillion) and net profit reached $872 million (₩1.2112 trillion). AMD explained, “With the U.S. government’s export restrictions on China, MI308 chip exports were banned, resulting in an inventory-related loss of $800 million in Q2.”

Lisa Su, AMD CEO, said during the earnings call that “AI business revenues declined year-over-year as sales to China essentially halted.” AMD stated that its Q2 adjusted gross margin was 43%, and without the export controls, it would have been 54%.

Data center segment revenue, which includes Central Processing Units (CPU) and Graphics Processing Units (GPU), rose 14% year-on-year to $3.2 billion. The client and gaming segment, which includes PC CPUs and gaming GPUs, was recorded at $3.6 billion, up 69% from a year ago.

The outlook for Q3 is positive. AMD expects shipment resumption as the Donald Trump administration suggested last July that export sales might be allowed again. Q3 revenue is forecast to reach $8.4 to $9.0 billion, surpassing the market consensus of $8.3 billion.

In June, AMD announced the new AI chip ‘MI400,’ targeting a launch next year. After the earnings report, AMD’s stock price dropped sharply in after-hours trading, down 6.34% to $1,632.25.

Reporter: Uimyung Park uimyung@hankyung.com