AMD's Big Revenue Forecast Leaves Investors Wanting More

AMD, a major computer chip company, announced on Tuesday that it expects to earn more money next quarter than most experts predicted. The company said it expects about $13 billion in revenue for the third quarter of 2025, beating what analysts had forecast. AMD's strong results are being driven by huge demand for its chips, which help power artificial intelligence, or AI, technology. Even so, AMD's stock price fell nearly 9 percent after the announcement, because investors were hoping for an even bigger outlook.

AMD's second-quarter results were also strong. The company brought in $11.54 billion in revenue, a 50 percent jump compared to the same time last year. Its adjusted profit was $1.66 per share, which also beat what analysts expected. These numbers show that AMD's business is growing fast, especially in AI chips.

One of AMD's biggest growth areas is its data-center business. Data centers are large buildings full of powerful computers that store and process huge amounts of information. AMD's data-center revenue more than doubled to $6.72 billion in just one quarter. CEO Lisa Su said the company expects data-center sales to more than double again by 2027.

AMD is often compared to Nvidia, which is currently the top maker of AI chips. AMD is seen as Nvidia's closest competitor in the graphics processing unit, or GPU, market. A GPU is a powerful type of chip that is especially good at handling the complex math needed for AI. AMD has been working hard to close the gap with Nvidia and win more customers.

To compete better, AMD has moved beyond selling single chips and now offers complete AI systems. These systems bundle together processors, networking equipment, and other hardware into one package. AMD's upcoming 2027 rack-scale AI platform will combine MI500 GPUs, Verano CPUs, and Pensando networking gear into one powerful system. This gives customers a simpler, all-in-one option.

AMD is also benefiting from growing demand for central processing units, or CPUs. CPUs are the main 'brains' of a computer and are used alongside GPUs in servers. This demand has helped AMD take customers away from Intel, another big chipmaker. Intel recently said it would increase its own spending to keep up with the boom in AI technology.

AMD has also landed some major business deals recently. In July, the company agreed to sell AI company Anthropic tens of billions of dollars' worth of AI servers. AMD also agreed to invest up to $5 billion in Anthropic, which makes a popular AI chatbot called Claude. These deals show that big technology companies trust AMD's chips to power their AI tools.

Another recent deal was with a company called Core Scientific. AMD locked in up to 2.5 gigawatts of data-center space through that agreement just a week ago. AMD also received the right to buy shares of Core Scientific's stock as part of the deal. Analysts say these agreements show that AMD's strategy of challenging Nvidia is beginning to pay off.