AMD Stock Slides as Profits Fall Short of Expectations

Advanced Micro Devices (AMD) reported third-quarter earnings that beat expectations, sending shares lower after the closing bell on Tuesday.

The chip maker’s third-quarter revenue rose 18% year over year to $6.82 billion, ahead of the Visible Alpha analyst consensus. Net income of $771 million, or 47 cents per share, rose from $299 million, or 18 cents per share, a year earlier, but fell short of Street estimates as costs rose.

AMD’s outlook is disappointing despite record data center revenue

AMD’s revenue gains came as data center sales more than doubled to a new high of $3.5 billion, driven by demand for the company’s artificial intelligence chips.

These results come after AMD launched its next-generation AI chips at its Advancing AI event earlier this month, but did not raise AI sales forecasts or announce new customers as many investors had hoped, weighing on its stock price.

AMD said Tuesday it expects fourth-quarter revenue to reach between $7.2 billion and $7.8 billion, up from $6.2 billion in the same quarter a year earlier. The analyst consensus was at the upper end of that range at $7.6 billion, according to Visible Alpha.

AMD shares fell more than 7% in extended trading Tuesday after the release.