Advanced Micro Devices (AMD) has warned it could lose as much as $1.5 billion in revenue this year due to fresh U.S. export restrictions on advanced artificial intelligence (AI) chips to China. The announcement came during a conference call on Tuesday, where CEO Lisa Su revealed that the second and third quarters would bear the brunt of the impact.
The new curbs require AMD to secure licenses to ship high-end AI processors to China, a key market that accounts for roughly a quarter of the company’s total earnings.Despite the setback, AMD delivered a second-quarter revenue forecast that surpassed Wall Street expectations, buoyed by a rush of advance chip purchases ahead of the enforcement of tariffs.
Analysts noted that customers, particularly major cloud service providers, are stocking up to avoid future supply disruptions. The company expects Q2 revenue of about $7.4 billion, plus or minus $300 million, ahead of analysts’ average estimate of $7.25 billion. Its shares fluctuated after the announcement, rising as much as 6% and falling as much as 3.5%, before settling about 1% higher in after-hours trading.
While the export controls pose a challenge, Su maintains that AMD’s data center business—home to much of its AI hardware—will see strong growth, with AI chip revenue projected to increase by double digits this year. The firm posted a robust 57% year-on-year increase in data center sales, reaching $3.7 billion, beating expectations. Overall, AMD’s total revenue surged by 36% to $7.44 billion, with adjusted earnings per share hitting 96 cents, slightly ahead of forecasts.
The company also expects an adjusted gross margin of 43%, which reflects an 11-point decline due to tariff-related charges. Meanwhile, other tech players showed mixed results. Nvidia, which faces similar licensing requirements, warned of a potential $5.5 billion charge, while chipmaker Marvell Technology and server manufacturer Super Micro both fell short of investor expectations.
Marvell postponed its Investor Day to 2026 citing economic uncertainty, and Super Micro revised its 2025 revenue forecast downward, raising concerns about their standing in the increasingly competitive AI hardware sector. Still, AMD’s strong showing underscores the ongoing demand for AI computing power from giants like Microsoft and Meta, who continue to invest heavily in data infrastructure.