TLDR: Advanced Micro Devices (AMD) anticipates robust third-quarter revenue, surpassing Wall Street expectations, driven by strong demand for its AI chips. However, the company’s access to the crucial Chinese market remains uncertain due to pending U.S. government license reviews for its MI308 AI chip exports, a situation that has already impacted revenue and could continue to do so.
Advanced Micro Devices (AMD) has projected a strong third-quarter revenue, exceeding analyst expectations, even as it navigates significant export restrictions impacting its access to the lucrative Chinese artificial intelligence (AI) chip market. The Santa Clara, California-based chipmaker anticipates revenue of approximately $8.7 billion for Q3 2025, with a margin of plus or minus $300 million. This forecast surpasses the average analyst estimate of $8.30 billion, according to data compiled by LSEG.
Despite this optimistic outlook, AMD’s projections do not include any revenue from shipments of its MI308 AI chips to China. This exclusion is due to ongoing reviews by the U.S. government of license applications required for these exports. The company had previously stated that U.S. curbs, announced in April, necessitated obtaining licenses to ship advanced AI processors to China, and it plans to resume shipments once approvals are granted. These restrictions have already had a tangible impact, with AMD forecasting a $1.5 billion hit to its revenue this year, primarily affecting the second and third quarters.
In its second-quarter 2025 financial results, reported on August 5, 2025, AMD posted adjusted earnings of 48 cents per share, slightly below the expected 49 cents. However, revenue reached $7.7 billion, exceeding the $7.4 billion forecast, marking a 32% year-over-year increase. The company’s profitability was significantly impacted by $800 million in inventory and related charges associated with the U.S. export control restrictions, particularly affecting its Data Center segment, which reported an an operating loss of $155 million compared to a profit in the prior year.
Demand for AMD’s AI chips remains robust, with the company betting on increased spending from businesses expanding their AI infrastructure. Major clients like Microsoft and Meta are reportedly increasing their adoption of AMD’s advanced processors for AI applications. CEO Lisa Su highlighted the rollout of the Instinct MI350 series accelerators, which AMD claims can rival Nvidia’s Blackwell chips in both training and inference. Su also noted that “Seven of the top ten AI companies are now using Instinct,” indicating a growing market presence for AMD as companies seek alternatives to Nvidia’s offerings.
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While AMD trails Nvidia in the overall AI accelerator market, it emphasizes strategic expansion and balancing export controls. The uncertainty surrounding China access remains a temporary ceiling on potential revenue in one of its largest markets, but the company’s strong Q3 forecast underscores its confidence in next-gen AI chips and broader market demand.
