Advanced Micro Devices Inc. (AMD, Financials), the semiconductor company that competes with Nvidia in artificial-intelligence chips, estimated third-quarter sales above Wall Street projections, but the outlook failed to satisfy investors after the stocks surge this year.
The chipmaker forecast third-quarter revenue of about $13 billion, plus or minus $300 million, ahead of Wall Streets estimate of roughly $12.52 billion. AMD also expects an adjusted gross margin of around 56%, broadly in line with forecasts.
Second-quarter revenue rose 50% from a year earlier to $11.54 billion, beating expectations of $11.28 billion. Adjusted earnings came in at $1.66 per share, four cents above consensus.
The biggest strength came from AMDs data-center business, where sales more than doubled to a record $6.72 billion. That result also topped analyst expectations and showed that demand for the companys AI chips remains strong.
Chief Executive Lisa Su said AMD expects data-center revenue to more than double again in 2027 as customers spend more on artificial-intelligence infrastructure.
Even so, the stock fell nearly 9% after hours. The reaction suggests investors wanted a bigger upside surprise after the shares had already climbed sharply ahead of the report.