diff --git a/tests/models/testing_utils/quantization.py b/tests/models/testing_utils/quantization.py
index 13eaaccdbf82..4b93ca010c2a 100644
--- a/tests/models/testing_utils/quantization.py
+++ b/tests/models/testing_utils/quantization.py
@@ -407,7 +407,9 @@ def _test_quantization_training(self, config_kwargs):
         # Step 3: run forward and backward pass
         inputs = self.get_dummy_inputs()
 
-        with torch.amp.autocast(torch_device, dtype=torch.float16):
+        # Use bfloat16 on XPU to avoid gradient underflow with quantized layers
+        autocast_dtype = torch.bfloat16 if torch_device == "xpu" else torch.float16
+        with torch.amp.autocast(torch_device, dtype=autocast_dtype):
             out = model(**inputs, return_dict=False)[0]
             out.norm().backward()