Semiconductors
AMD Beats in Q1 Yet Q2 Data Center to Decline due to Export Controls
AMD reported a double beat in Q1 with revenue of 36% and data center growth of 57%, with the beat filtering down to the bottom line with EPS growth of 55% -- ahead of revenue. However, the excitement from the beat soon faded after hours as the earnings call Q&A was decisively about the impacts of China export controls. AMD is the first to report among the larger AI accelerator design companies this quarter, and the information shared offers a glimpse at the harsh reality that AI semiconductors face as these companies adjust to global tensions. For AMD, the impact of the MI308 being banned from China will be $700 million in Q2 and $1.5 billion in fiscal year 2025. This impact seems significant given AMD is $5B-ish in AI revenue, yet AMD assured analysts on the call their data center revenue would see “strong double-digit growth” this year despite declining sequentially in Q2.
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