Advanced micro devices reported third-quarter results on Tuesday, with profits in line with expectations and revenue slightly better than expectations.

Here’s how the company did, compared to LSEG estimates for the quarter ended September 28:

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

AMD said revenue from its key data center business doubled 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% in extended trading on Tuesday.

AMD said it expected revenue of about $7.5 billion in the current quarter, in line with consensus expectations of $1.16 in adjusted earnings per share on revenue of $7.54 billion. 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. The total average absolute deviation, or MAD, increased sales by 18% year over year.

AMD’s shares are up about 20% so far in 2024, although rivals like Nvidia and Broadcom have posted much bigger gains over the same period, driven by rising demand for AI chips. AMD is the second largest provider of graphics processing units (GPUs) in data centers, which are used to train and deploy large generative AI models.

In October, AMD announced a new artificial intelligence chip, the MI235X, and said it expected the AI ​​GPU market to be worth $500 billion by 2028. The company also said earlier this year that it expected sales of about $4 billion in AI chips this year. , or approximately 15% of the company’s total sales.

AMD’s AI chips are reported in the data center segment, which more than doubled year-over-year to total revenue of $3.5 billion. AMD said this was mainly driven by strong sales of its Instinct-branded AI GPUs. Total data center revenue increased 122% year over year.

AMD’s gross margin grew to 54%, which the company said was due to higher data center revenue.

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

AMD also makes chips for gaming consoles and PCs. The gaming category fell, with revenue down 68% year over year, which the company attributed to a decline in “semi-custom revenues,” which include custom chips for gaming consoles such as the Sony PlayStation 5.

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