Advanced Micro Devices (NASDAQ:AMD) fell nearly 5% in premarket trading at 9.14am Wednesday after sidestepping questions around its China AI chip sales outlookdespite posting better-than-expected results and a bullish Q3 revenue forecast. On the earnings call, CEO Lisa Su confirmed that the company isn’t including any revenue from its MI308 chips in guidance, as U.S. export licenses are still under review. That left Wall Street guessing on how much, if any, upside could come from the recent easing of restrictions. China remains a critical market for AMD and its rival Nvidia (NVDA), and the policy shift had raised hopes of a revenue rebound. But Su kept it cautious: We are not including any MI308 revenue in our third-quarter guidance, she said. Analysts pushed hard for specifics. They didn’t get them.
What they did get, though, was a reiteration of AMD’s longer-term AI ambitions. Su sees a clear path to scaling its AI business into the tens of billions, and flagged the company’s upcoming MI350 lineup as a key lever. Still, investors looking for firm numbers or timelines walked away empty-handed. CFO Jean Hu added that previously written-down inventory in China won’t convert to revenue quicklyit includes incomplete chips that need more work. Translation: even with a green light from regulators, meaningful China AI revenue could take time to show up in the numbers.
And yetAMD’s core business is delivering. Q2 sales rose 32% to $7.7 billion, topping estimates, with data center revenue up 14% and PC-related revenue jumping 67%. Its Q3 revenue forecast of $8.7 billion also came in above the Street’s $8.37 billion estimate. AMD is still the best-performing stock in the semiconductor space this year, up 44%. But the China overhangand Nvidia’s dominance in AI acceleratorsmeans the road ahead won’t be easy. AMD may be on a strong trajectory, but the market is watching closely for proof it can translate ambition into AI market share.
This article first appeared on GuruFocus.