- New China chip curbs mean hefty bill
- Q1 revenue, earnings and guidance beat
- Ongoing uncertainty caps stock recovery
First-quarter revenue and earnings may have beaten estimates, and guidance for Q2 was better than Wall Street expected, yet Advanced Micro Devices (AMD:NASDAQ) is struggling to win investors’ backing, with the after-hours share price response muted.
Pre-market data has the stock nudging less than 2% higher to about $100 when Wall Street opens later today, which will still leave the stock down 23% year-to-date.
AMD is widely seen the next-best AI chip play after Nvidia (NVDA:NASDAQ) and thus remains trapped in president Trump’s web of tariff uncertainty.
The Silicon Valley firm forecast a $1.5 billion hit to revenue for the year to December 2025 due to new US curbs on chips, which require the company to obtain a license to ship advanced AI processors to China, echoing Nvidia’s warning earlier this year that it faced write-offs of up to $5.5 billion.
CHINA CHIP CURBS
Under the Biden and Trump administrations, the US has pursued increasingly aggressive curbs on AI chip exports to China aimed at hobbling the country’s ability to build advanced AI models and applications which, according to the US, could have national security implications.
AMD chief executive Lisa Su said on a conference call most of the impact from the curbs would affect the second and third quarters this year. Even so, Su said she still expects AI chip revenue from the company’s data centre business to grow this year by ‘strong double digits’.
‘It's certainly a headwind, but one which we think is well contained given everything else we have going on,’ added Su.
You could argue that AMD’s underlying optimism around overall AI demand ‘trumps’ China chip curb issues, yet investors remain understandably cautious as uncertainty swirls around the high-tech industry and China.
