AMD’s restricted access to China’s AI chip market may heavily dent revenue despite a strong Q3 forecast; here’s why

Advanced Micro Devices (AMD) forecast third-quarter revenue above Wall Street estimates on Tuesday (August 5, 2025) but warned that its access to the China market remains uncertain due to the pending review of its license applications to export its MI308 chips to the East Asian country.

AMD, the second-largest maker of AI accelerator chips, is betting on upbeat demand for its artificial intelligence chips from businesses rushing to expand infrastructure to dominate the latest technology. Shares of the Santa Clara, California-based company rose 2% in extended trading.

AMD’s Q3 projections

The company expects revenue of about $8.7 billion for the third quarter, plus or minus $300 million, compared with analysts' average estimate of $8.30 billion, according to data compiled by LSEG.

The outlook does not include any revenue from AMD's AI chip MI308's shipments to China, as license applications are currently under review by the US government, the company said.

The company said last month the Department of Commerce would review its license applications to export its MI308 chips to China, and it plans to resume those shipments when licenses are approved, after U.S. curbs announced in April required it to obtain a license to ship advanced AI processors to China.

AMD had forecast a $1.5 billion hit to revenue this year due to these curbs, with most of the impact affecting the second and third quarters.

AMD shares 2025 performance

AMD's shares have climbed more than 40% this year, far outpacing a nearly 12% jump in the benchmark chip index, as investors bet on the company's ability to capitalize on the widespread use of AI.

Demand for AMD processors remains strong

Demand remains robust for AMD's advanced processors that power complex AI systems for Microsoft, Meta Platforms, generative AI leader OpenAI, and other customers, with the company set to benefit from cloud giants bumping up their hefty spending plans for building AI infrastructure.

Meta has raised the bottom end of its annual capital expenditure forecast by $2 billion, to a range of between $66 billion and $72 billion. Similarly, Microsoft forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand.