Advanced Micro Devices Inc (NASDAQ:AMD) stock fell 7.97% (As on August 6, 11:23:55 AM UTC-4, Source: Google Finance) after the company reported quarterly earnings that missed estimates. AMD reported net income during its fiscal second quarter of $872 million, or 54 cents per share, increasing from $265 million, or 16 cents per share in the year-ago period. During the quarter, AMD announced new AI chips called the Instinct MI400 that are expected to hit the market next year. OpenAI CEO Sam Altman committed to using AMD’s newest GPUs. AMD is also grappling with chip export controls that have been placed on some of its AI chips because the U.S. government worries that powerful GPUs could be used by adversaries to surpass American capabilities or be used for military purposes.

Moreover,  Client and Gaming, which includes the company’s CPUs for laptops and desktops, was up 69% on an annual basis to $3.6 billion. Client revenue rose 57% to $2.5 billion, in line with the StreetAccount expectations of $2.56 billion, partially driven by strong demand for the company’s latest desktop CPUs, which it calls AMD Ryzen Zen 5. Gaming revenue was up 73% year over year to $1.1 billion, versus a StreetAccount estimate of $784 million, with its growth due to increased demand for custom chips for game consoles and gaming GPUs.

AMD in the second quarter of FY25 has reported the adjusted earnings per share of 48 cents, missing the analysts’ estimates for the adjusted earnings per share of 49 cents, according to LSEG expectations. The company had reported the adjusted revenue growth of 32 percent to $7.69 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $7.42 billion. AMD’s adjusted gross margin during the quarter was 43%. The company said it would have been 54% if not for export control costs.

For the current quarter, AMD expects sales of $8.7 billion, plus or minus $300 million, versus expectations of earnings of $8.3 billion. The MI308 was previously barred for export to China in April, which the company said cost it $800 million in the June quarter. However, the company said in July that it expected shipments to resume after the Trump administration signaled that it would approve waivers. AMD said its outlook doesn’t include any revenue from its China-focused AI chip called the MI308 and its license applications are currently being reviewed by the Department of Commerce.