AMD (AMD) reported its fiscal third-quarter results on Tuesday, meeting expectations for earnings per share and beating revenue. However, Wall Street wasn't particularly enthusiastic about the company's fourth-quarter revenue outlook, which is said to be between $7.2 billion and $7.8 billion. Wall Street was looking for $7.55 billion.

The chipmaker's stock fell more than 5% immediately after the announcement amid concerns that the company's growth in artificial intelligence could slow. Still, CEO Lisa Su said demand for the company's offerings is strong.

“Looking forward, we see significant growth opportunities in our data center, customer and embedded businesses, driven by the insatiable demand for more computing power,” she said in a statement.

For the quarter, AMD posted adjusted earnings per share of $0.92 on revenue of $6.8 billion. Based on analyst consensus estimates compiled by Bloomberg, Wall Street expected adjusted earnings per share of $0.92 on revenue of $6.7 billion. The company reported earnings per share of $0.70 on revenue of $5.8 billion in the same quarter last year.

AMD's data center business segment – its most important – brought in $3.5 billion, compared to expectations of $3.46 billion, up from $1.59 billion in the third quarter of 2023.

The company's second-largest segment, customer business, which includes sales of CPUs for desktops and laptops, topped $1.9 billion versus expectations of $1.71 billion, up from $1.45 billion last year Year. However, AMD's gaming segment plunged 69% year-over-year, generating revenue of $462 million compared to $1.5 billion in the same period last year.

The gaming segment includes sales of AMD's Radeon graphics cards for laptops and desktops, as well as custom chips for consoles such as Xbox and PlayStation.

Sales of graphics cards for gaming PCs and consoles have declined since their peak during the pandemic, as consumers bought devices to while away their nights and days stuck indoors on the couch.

AMD's win comes less than a month after the company announced three of its upcoming chips, including its 5th generation AMD EPYC central processing unit (CPU) for servers, its Instinct MI325X AI chip and the Ryzen AI Pro 300 for AI. PCs for business users.

The chip company's share price has risen 72% in the past 12 months, outperforming the broader S&P 500 (GSPC), which is up 41%, and struggling Intel (INTC), whose share price is down a staggering 35%. Nvidia (NVDA), meanwhile, continues to trend higher, rising a staggering 246% over the last year.

AMD is Nvidia's biggest rival in the AI ​​chip space. Of course, since Nvidia is estimated to have between 75 and 90% of the market, that doesn't mean much.

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