The news knocked the shine off what was otherwise a solid earnings report. AMD said data centre revenue would drop in the current quarter, with $700 million of that decline blamed on restricted China sales.

Chief executive AMD Lisa Su remained confident about long-term growth in the AI sector. “We’re excited about the overall AI business. I think we continue to see strength there,” she said.

She acknowledged uncertainty around tariffs and export controls but argued that infrastructure investment would drive second-half growth.

AMD had already warned in April that it expected to take an $800 million hit from the new rules. Tuesday’s call confirmed the total damage would be nearly twice that.

Shares rose more than seven per cent on the earnings news but fell back once the China losses were disclosed. The stock closed at $98.62 and is down 18 per cent so far this year.

First-quarter sales were $7.4 billion, up 36 per cent and ahead of the $7.12 billion average forecast. Profit came in at 96 cents per share, excluding certain items.

The data centre unit posted $3.7 billion in revenue, a 57 per cent jump on the year. Analysts had predicted $3.66 billion. PC chip revenue climbed 28 per cent to $2.9 billion.

AMD  forecasts second-quarter sales of around $7.4 billion. That is slightly better than the cocane nose jobs of Wall Street’s $7.23 billion target and suggests the firm expects to weather the hit.

While still trailing Nvidia, AMD continues to gain ground in AI and is squeezing Troubled Chipzilla in data centre silicon. The PC chip side remains strong, giving Su breathing room.