01:08 PM EDT, 05/07/2025 (MT Newswires) -- Advanced Micro Devices ( AMD ) pulled off a difficult feat Tuesday, reporting better-than-expected financial results for Q1 and "remarkably" raising its Q2 revenue forecast above Wall Street estimates, analysts at Morgan Stanley said on Wednesday in a research note.

The chipmaker's improved Q2 outlook, climbing to a range of $7.1 billion to $7.7 billion, was maybe its most impressive accomplishment given the likely impact of export controls on China, the analysts said. Overall, the company is now expecting the restrictions on Chinese semiconductor sales to reduce revenue by around $1.5 billion this year, including a $700 million hit during the current quarter and the rest largely occurring during Q3, they said.

"That's a slightly smaller headwind that we had expected, but (still) in the ballpark," the analysts said.

Based on the new guidance, Morgan Stanley is now expecting Advanced Micro to earn $0.54 per share in Q2, excluding one-time items, on around $7.41 billion in revenue. For 2025, the firm is projecting non-GAAP net income of $4.20 per share, down from $4.53 per share previously, and $32.41 billion in revenue, up from $31.48 billion.

The Morgan Stanley analysts also lowered their price target for Advanced Micro shares to $121 from $137 while reiterating their equal-weight stock rating, citing macro-economic factors and a slightly more speculative position relative to rival chipmakers Nvidia ( NVDA ) and Broadcom ( AVGO ) , especially with its artificial intelligence offerings.

Price: 98.39, Change: -0.23, Percent Change: -0.24