Advanced Micro Devices reported third-quarter results Tuesday, with earnings in line with forecasts and revenue that slightly beat expectations.

Here’s how the company did, compared with LSEG estimates for the quarter ending Sept. 28:

• Earnings per share: 92 cents adjusted vs. 92 cents expected
• Revenue: $6.82 billion vs. $6.71 billion expected

AMD said its important data center business doubled in sales for the second quarter in a row, but overall revenue guidance for the fourth quarter was in line with consensus expectations.

AMD shares fell 6% on Tuesday in extended trading.

AMD said it expected about $7.5 billion in sales in the current quarter, in line with consensus expectations of $1.16 in adjusted earnings per share on $7.54 billion in revenue. That would be a 22% year-over-year decline for the December quarter.

The chipmaker reported net income of $771 million, or 47 cents per share, compared with $299 million, or 18 cents per share, a year ago. Overall mean absolute deviation, or MAD, revenue was up 18% on an annual basis.

AMD shares are up about 20% so far in 2024, although rivals such as Nvidia and Broadcom have had much greater gains during the same period, driven by the increasing demand for AI chips. AMD is the second-largest vendor of data center graphics processing units, or GPUs, which are used to train and deploy large generative AI models.

In October, AMD announced a new artificial intelligence chip called the MI235X and said it expected the AI GPU market to be worth $500 billion by 2028. The company said on Tuesday that it expected $5 billion in AI chip sales this year, up from a previous forecast of $4.5 billion.

“Customer and partner interest for MI325X is high. Production shipments are planned to start this quarter,” said AMD CEO Lisa Su on a call with analysts.

AMD’s AI chips are reported in its data center segment, which more than doubled on an annual basis to $3.5 billion in total sales. AMD said it was mainly driven by the strong sales of its Instinct-branded GPUs for AI. Overall data center revenue was up 122% year over year.

AMD’s gross margin expanded to 54%, which the company said was because of higher data center revenue.

AMD also makes central processing chips for laptops and servers. PC sales are reported in AMD’s client segment, which grew 23% during the quarter to $1.9 billion. During the quarter, AMD’s chips were included in high-end laptops marketed by Microsoft as “Copilot+” machines that can run advanced AI included with Windows.

AMD also makes chips for gaming consoles and PCs. Its gaming category slumped, with sales sliding 68% year over year, which the company blamed on a decrease in “semi-custom revenue,” which includes custom chips for game consoles such as the Sony PlayStation 5.

The company’s embedded business, which includes less-expensive chips for industry and other applications, fell 25% annually to $927 million in sales.