AMD Q2 Earnings Preview: All Eyes on MI308, AI Guidance, and Margins

Advanced Micro Devices ($AMD) is set to release its Q2 2025 earnings after the U.S. market closes on August 5th. Expectations for Q2 are modest, but investors are laser-focused on several key themes that could shape sentiment going forward—particularly MI308’s post-ban impact, full-year AI revenue guidance, and margin dynamics across its core businesses.

Let’s break down what to watch:

Street Expectations Are Tepid, But the Stakes Are High

Analysts expect Q2 revenue to come in at $7.43 billion, up 27% year-over-year, essentially flat from last quarter. AMD had earlier guided revenue to $7.4 billion, signaling some softness relative to Q1.

On earnings, the headline adjusted EPS is expected to be $0.48, a 30% decline from last year. However, AMD previously guided for a Non-GAAP EPS of $0.47, which includes an $800 million charge related to the MI308 export ban. Excluding the MI308-related charge, AMD estimates its Non-GAAP EPS would have been $0.90—highlighting strong underlying profitability despite the export hit.

The Non-GAAP gross margin, excluding the MI308 impact, is guided at 54%, up slightly from last quarter and last year. But if the MI308-related charges are included, the reported margin drops significantly to 43%.

MI308 Ban Reversal: What’s the Real Revenue Impact?

One of the biggest overhangs in Q2 has been the U.S. export restrictions on high-end AI chips, which significantly affected AMD’s MI308 sales to China. The company previously estimated a $700 million hit to revenue in Q2 and $1.5 billion for the full year due to these restrictions.

But that narrative is starting to shift.

On July 15th, both AMD and Nvidia confirmed that their China-optimized AI chips—MI308 and H20—are once again available for sale in the mainland. While the timing means this reversal won’t help Q2 revenue, it could meaningfully boost AMD’s outlook for Q3 and beyond.

That’s why this earnings call will be more about the outlook than the numbers. Investors will be listening closely for commentary on how quickly AMD expects China demand to rebound and whether those sales will flow through cleanly into margins.

Will We Get a Clear AI Revenue Guide for 2025?

AMD has been one of the more transparent chipmakers when it comes to AI revenue expectations—at least until recently. Over the past year, management steadily raised its 2024 data center GPU revenue guidance from $2 billion to $5 billion.

However, in its Q1 call, AMD stopped short of offering a concrete 2025 AI revenue forecast. Instead, it pointed to “high double-digit growth” year-over-year and said most of that growth would come in the second half of the year, driven by ramping shipments of the MI350 series.

With sentiment around AI hardware stocks still volatile, many investors are hoping AMD will reintroduce a formal AI guidance track to help frame expectations for H2.

Can FPGA Momentum Return?

AMD’s embedded business—largely driven by Xilinx's FPGA products—was once a major profit engine for the company. But over the past few quarters, softness in the FPGA market has weighed on performance.

Now there’s a hint of a rebound.

Intel’s soon-to-be-divested Altera unit just posted a strong Q2, with FPGA revenue up 24% YoY and 22% QoQ, its first double-digit YoY growth in years. That has renewed hopes that the sector is stabilizing and entering a recovery phase.

If Xilinx can follow suit, it could provide a welcome lift to AMD’s bottom line, especially since embedded margins have historically been higher than data center or client segments.

Will AMD Finally Overtake Intel in PC Margins?

AMD has already gained significant market share from Intel in desktop and laptop CPUs. But catching up on margins has proven more difficult.

This quarter could mark a turning point.

Intel’s Q2 showed continued margin pressure in its client computing group, while AMD’s PC business has delivered eight straight quarters of double-digit revenue growth. If AMD can edge ahead on operating margins, it would be a symbolic win—suggesting not just growth, but quality growth.

Investor Sentiment

Despite the short-term earnings drag, sentiment remains generally positive. The stock has climbed over 46% year-to-date, with analysts from UBS and BofA recently raising price targets to $210 and $200, respectively. The belief is that once the MI308 situation clears, AMD will re-accelerate in the back half of the year.

Bottom Line

The market isn’t expecting a blowout Q2. But that might be a good thing—because what really matters is AMD’s tone on the quarters ahead. The MI308 resumption opens a path for upside in H2, but the company needs to provide clarity on how quickly those sales can ramp—and whether its AI ambitions are still on track.

Watch for any updates to full-year AI guidance, commentary on China demand, and signs of recovery in the FPGA space. CEO Lisa Su’s comments could go a long way in shaping sentiment—not just toward AMD, but toward the broader AI and semiconductor complex.

What’s Your Estimate?

Will AMD beat expectations on the back of MI300 and AI demand, or confirm the slowdown in its legacy businesses?

Submit your Q2 EPS estimate now for a chance to win 10,000 USDC!

👉 [Join the challenge here]