AMD's Q2 earnings miss overshadowed by strong AI roadmap, record revenue growth, and expanding partnerships with global hyperscalers

SINGAPORE, SG / ACCESS Newswire / August 11, 2025 / Merifund Capital Management notes that AMD's latest quarterly results highlight a critical juncture for the semiconductor industry, with the company balancing significant top-line growth against intensifying regulatory constraints. Revenue in the second quarter reaches USD 7.35 billion, representing a 32% year-over-year increase, yet adjusted earnings per share of USD 0.46 fall slightly short of consensus expectations of USD 0.47-0.49. Market reaction sees shares decline by approximately 6%, reflecting investor caution over export restrictions and earnings pressure.

U.S. government measures introduced in April 2025 targeting AMD's MI308 data-centre GPUs effectively remove access to the Chinese market, resulting in an estimated USD 763.37 million in inventory and related charges for the quarter. Without these charges, AMD's non-GAAP gross margin would be close to 54%, compared with the reported 43.3%. Merifund Capital Management's analysis underscores that the company's accelerated transition to its next-generation GPU portfolio may provide a structural advantage as hyperscalers seek alternative suppliers.

Segment performance presents a mixed picture. Data-centre revenue increases 14.3% year-over-year to USD 3.09 billion, client revenue rises 67.5% to USD 2.39 billion, and gaming revenue grows 73.2% to USD 1.07 billion, while the embedded segment declines 4.3% to USD 786.27 million. The strong performance in multiple business lines reinforces Merifund's view that AMD retains operational resilience despite geopolitical headwinds.

The launch of the Instinct MI350 series this year delivers fourfold generation-on-generation AI compute gains and incorporates 288 GB of HBM3E memory with bandwidth reaching 8 TB/s. AMD's preview of its MI400 series for 2026 introduces a leap to 432 GB of HBM4 with 19.6 TB/s bandwidth, more than doubling memory capacity. Merifund's report highlights that this product trajectory positions AMD as a credible challenger in the high-performance AI accelerator space.

Partnerships with OpenAI, Meta, and Microsoft support this assessment. OpenAI intends to deploy the MI350 series in production workloads, Meta is integrating MI300X GPUs into Llama 3 and Llama 4 inference, and Microsoft is making MI300X available through Azure. While Nvidia retains an estimated 85-92% market share, AMD's current position in the 8-14.3% range demonstrates its growing foothold.

The total addressable market for AI accelerators is projected to exceed USD 477.11 billion by 2028. Merifund Capital Management estimates that even a 5% market share could push AMD's earnings per share above USD 8.59 within three years. The company's open ecosystem approach through the ROCm software stack is a differentiator, offering hyperscalers supply-chain diversification while optimising cost-to-performance metrics.

Merifund Capital Management maintains that AMD's execution on its AI roadmap, coupled with strategic industry partnerships, provides clear visibility into scaling opportunities. The firm's view is that while quarterly results face near-term challenges, the long-term growth engine remains robust.

About Merifund Capital Management

Founded in 2010, Merifund Capital Management Pte. Ltd. (UEN: 201024554E) is a Singapore-headquartered hedge-fund management firm specialising in ESG-integrated investment strategies across traditional long-only asset and portfolio management, long/short equity, global macro, event-driven, and systematic trading. The firm strategically employs derivatives to optimise market opportunities while emphasising capital preservation, liquidity, and disciplined risk controls. Merifund serves accredited investors, family offices, foundations, and endowments, and is expanding its offering to retail investors. For additional information, visit https://merifund.com/insights or contact Tao Yang at media@merifund.com.

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Contact Person: Tao Yang

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SOURCE: Merifund Capital Management