AMD’s second quarter results were met with a significant negative market reaction, reflecting investor concerns despite management highlighting strong performance in several core areas. The company pointed to record sales of its EPYC and Ryzen processors, with CEO Lisa Su noting, “We set records for both EPYC and Ryzen CPU sales, reflecting the broad-based demand for our differentiated high-performance data center, PC and embedded processors.” However, the quarter was also marked by a substantial inventory write-down related to U.S. export controls, which impacted gross margins and contributed to a negative operating margin.

Is now the time to buy AMD? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From AMD’s Q2 Earnings Call

• Thomas O'Malley (Barclays) asked about potential pull-forward in client business demand; CEO Lisa Su clarified that end-user consumption remained strong and most growth was not due to pull-forward.
• Vivek Arya (Bank of America Securities) inquired about the scale and timing of sovereign AI opportunities; Su emphasized these are incremental to existing growth and highlighted regulatory dependencies and additive potential from MI355 and MI400 series.
• Timothy Arcuri (UBS) requested specifics on the MI355 ramp and the likelihood of reaching multi-billion dollar run rates; Su described customer adoption as ahead of schedule and noted strong interest in both MI355 and the upcoming MI400 series.
• Ross Seymore (Deutsche Bank) questioned changes in MI350 family adoption versus prior expectations; Su responded that customer interest and adoption have accelerated, with new customers engaging more rapidly than anticipated.
• Joshua Buchalter (TD Cowen) asked about maintaining gross margin stability amid GPU ramp; CFO Jean Hu attributed this to expanding high-margin server and commercial PC sales and operational efficiency gains, despite the margin-dilutive effect of GPUs.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) the production and adoption ramp of MI350 and MI355 GPUs across hyperscaler and sovereign customers, (2) the recovery trajectory of the embedded segment as demand stabilizes in key industrial and communications markets, and (3) regulatory developments impacting export licenses for MI308 shipments to China. Ongoing expansion in commercial PC and server CPU adoption will also be important to monitor.

AMD currently trades at $174.63, in line with $174.42 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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