06:29 AM EDT, 05/07/2025 (MT Newswires) -- Advanced Micro Devices ( AMD ) shares rose early Wednesday as it issued an upbeat fiscal second-quarter revenue outlook at the midpoint, including the impact of new export licensing requirements, while the chipmaker reported better-than-expected results for the preceding three-month period.

The company anticipates revenue of about $7.4 billion, plus or minus $300 million, for the current quarter, representing annual growth of 27% at the midpoint, Chief Financial Officer Jean Hu said during a late Tuesday earnings call, according to a FactSet transcript. The current consensus is for revenue of $7.33 billion. The stock was up 2.7% in the most recent premarket activity.

The guidance includes an estimated revenue reduction of $700 million related to the US government's requirement announced in April for a license to export the company's MI308 chips to China, Hu said on the call. On a sequential basis, AMD expects revenue in the client and gaming segment to increase by double digits, embedded revenue to be "flattish" and data center revenue to decrease due to the exclusion of MI308 revenue, according to Hu.

The export licensing requirements came amid the ongoing trade conflict between the US and China, following President Donald Trump's announcement of reciprocal tariffs in April. US Treasury Secretary Scott Bessent and trade representative Jamieson Greer are expected to meet their Chinese counterparts for trade talks in Switzerland this weekend, media outlets reported Tuesday.

Adjusted gross margin is pegged at 43%, including roughly $800 million in charges for inventory and related reserves linked to the export controls, AMD said. Excluding the charge, the metric is expected to be at about 54%.

The chipmaker projects the export licensing requirements to impact revenue by about $1.5 billion for full-year 2025, Hu told analysts. The Street is looking for sales of $31.47 billion.

For the quarter ended March 29, the company reported adjusted earnings of $0.96 a share versus $0.62 the year before, ahead of the average analyst estimate on FactSet for $0.94. Revenue climbed 36% year over year to $7.44 billion, surpassing the market view for $7.12 billion.

"We delivered an outstanding start to the year, despite the evolving dynamics related to tariffs and the regulatory environment," Chief Executive Lisa Su said on the call. "Growth accelerated for the fourth consecutive quarter year-over-year, driven by strength in our core businesses and expanding data center and (artificial intelligence) momentum."

Data center revenue jumped 57% to $3.67 billion, buoyed by growth in the firm's EPYC central processing unit and Instinct GPU sales. Revenue from the client segment surged 68% to $2.29 billion amid strong demand for the company's Zen 5 Ryzen processors.

Gaming sales dropped 30% to $647 million due to lower semi-custom revenue. Revenue in the embedded segment declined 3% to $823 million amid mixed demand in end markets, the company said.