AMD to report Q2 earnings as Wall Street looks to AI, PC sales growth

AMD (AMD) will report its second quarter results after the bell on Tuesday, giving Wall Street a better understanding of the AI chip market ahead of rival Nvidia’s (NVDA) report later this month.

The company stands to benefit from the resumption of its chip sales in China after the Trump administration briefly banned them in April, as well as the potential for pull-forward in CPU sales as manufacturers built up inventory to fend off the impact of tariffs on PC sales.

AMD shares are up 47% year to date and 34% over the last 12 months, while Nvidia shares are up 33% and 66%, respectively.

For the quarter, AMD is expected to see adjusted earnings per share (EPS) of $0.49 on revenue of $7.4 billion, according to Bloomberg consensus estimates. That would represent a 29% decline in EPS but a 27% jump in revenue.

Part of the reason for that is that AMD is expected to take a $700 million hit from the Trump administration’s ban on the sale of the company’s MI308 AI chips for China. That’s far lower than the $4.5 billion write-down Nvidia took in Q1 and the $8 billion it said it would take in Q2 due to the impact of the ban on its own China-specific chip.

Trump reversed course on the ban last month, which should help make up for some of those losses in the coming quarters.

AMD should also benefit from the launch of its MI350 line of AI chips, designed to go toe-to-toe with Nvidia’s Blackwell-powered chips. According to AMD, the MI350 line, which includes the MI350X and MI355X, offers four times the AI compute performance and a 35x increase in inferencing capabilities versus its predecessors.

“We expect AMD to post higher results and higher guidance, as we see improving traditional server demand and latest generation share gains, as well as strong demand for MI355,” KeyBanc Capital Markets analyst John Vinh wrote in an investor note ahead of the company’s earnings.

AMD’s Data Center segment is expected to bring in $3.2 billion in the quarter, up 14% year over year from Q2 2024 when the business generated $2.8 billion.

Beyond the Data Center segment, AMD’s Client business, which includes sales of CPUs for desktops and laptops, is expected to see $2.5 billion. That’s a massive 71% jump versus the $1.4 billion it brought in during the same quarter last year.

That anticipated increase is thanks to the anticipated pull-forward in laptop and desktop shipments to combat the Trump administration’s tariffs. But it will also hurt sales in the back half of the year.

“Similar to [Intel], we expect AMD Client to benefit from tariff-related pull-in of demand in Q2, and that same benefit to likely reverse in 2H, leading to below-seasonal Q3/Q4,” BofA Global Research analyst Vivek Arya wrote in an investor note.

“For [Intel], new Street estimates for [Client Computer Group] now point to +4%/+2% [quarter-over-quarter growth] in Q3/Q4, below +7%/+4% prior to Q2 earnings and also below typical +9%/+4%,” Arya added. “However, for AMD, we highlight Street estimates already embed the demand normalization, with Client estimates of +2%/+0% in Q3/Q4 well below typical +15%/+14%.”