Advanced Micro Devices ( AMD ) reported quarterly profit on Tuesday that missed expectations, sending the company's shares down about 4% in after-hours trading.Here's how the chipmaker's results compared with Refinitiv's (LSEG) expectations for the quarter ended in June: Adjusted earnings per share: 48 cents, vs. 49 cents expected; Revenue: $7.69 billion, vs. $7.42 billion expected.



For the current quarter, AMD expects sales of $8.7 billion (plus or minus $300 million), above estimates of $8.3 billion.

AMD's fiscal second-quarter net income was $872 million, or 54 cents a share, up from $265 million, or 16 cents a share, a year earlier. During the same period, Nvidia's total sales increased 32% year over year, from $5.84 billion last year.

AMD is the second-largest maker of artificial intelligence graphics processing units (GPUs) after Nvidia, which holds the lion's share of the market. But large AI customers such as Meta and OpenAI are increasingly looking to AMD as an alternative to Nvidia's higher-priced chips, especially at the inference stage, when AI models are deployed to the public.

This quarter, AMD released a new AI chip called MI400, which is expected to be available next year. OpenAI CEO Sam Altman has pledged to use AMD's latest GPUs.

AMD is also grappling with chip export controls — some AI chips have been restricted due to U.S. government concerns that high-performance GPUs could be used by adversaries to exceed U.S. technological capabilities or for military purposes.

MI308 chips were banned from export in April, which the company said cost it $800 million in revenue in the June quarter. AMD said in July, however, that it expected shipments to resume as the Trump administration signaled it would grant exemptions.

AMD's adjusted gross margin for the quarter was 43%. The company said gross profit margins would have been 54% if export control costs were not taken into account.

In addition to GPUs, AMD's core business is manufacturing central processing units (CPUs) to compete with Intel to provide computing power for traditional servers.

Both businesses are included in the company's data center segment, which had revenue of $3.2 billion in the quarter, up 14% year over year.

AMD's other major division is the "Clients & Gaming" division, which covers CPUs for laptops and desktops, as well as GPUs for 3D gaming. Revenue for the segment rose 69% year over year to $3.6 billion. Among them, client business revenue increased 57% to $2.5 billion, basically in line with StreetAccount’s forecast of $2.56 billion, driven in part by strong demand for the company’s latest desktop CPUs (AMD Ryzen Zen 5).

AMD said gaming business revenue rose 73% year-on-year to $1.1 billion, higher than StreetAccount's forecast of $784 million. The growth was driven by increased demand for custom chips for game consoles and gaming GPUs.