AMD Stock Dips Despite Strong Revenue Growth as Margins Weigh on Investor Sentiment

Advanced Micro Devices Inc. shares fell 1.4% in after-hours trading despite reporting record quarterly revenue of $7.7 billion, marking a 32% year-over-year increase. The decline reflects market concerns over shrinking profitability rather than the company's fundamental growth trajectory.

While AMD's EPYC and Ryzen processors drove robust demand across cloud and enterprise sectors, an $800 million inventory write-down tied to Chinese export controls slashed gross margins to 43% from 53%. Earnings per share consequently dropped to $0.48 from $0.69 in the prior-year period.

CEO Lisa Su emphasized the company's accelerating AI business, with MI350 series accelerators entering volume production ahead of schedule. This strategic pivot toward artificial intelligence infrastructure could position AMD for sustained growth as data center operators increasingly demand high-performance computing solutions.