Shares of Arteris, Inc. (AIP) tumbled 13.46% on Tuesday following the release of the company's second-quarter 2025 financial results. The sharp decline comes as the semiconductor IP provider missed earnings estimates, despite announcing a partnership with Advanced Micro Devices (AMD).

For the second quarter, Arteris reported an adjusted loss per share of $0.11, falling short of analysts' expectations of $0.10. While the company's revenue grew 13% year-over-year to $16.5 million, slightly beating the consensus estimate of $16.35 million, the earnings miss appears to have overshadowed the top-line growth. The company also provided revenue guidance for the third quarter in the range of $16.8 million to $17.2 million, which may have disappointed investors.

Despite the negative reaction to earnings, Arteris announced a significant partnership with AMD, licensing its FlexGen smart network-on-chip IP for use in AMD's AI-focused chiplets. This news initially caused Arteris shares to jump 45.3% in pre-market trading. However, the excitement was short-lived as investors seemingly focused more on the company's current financial performance and near-term outlook. The stark contrast between the pre-market surge and the eventual plunge highlights the market's complex reaction to mixed news from the company.