AMD's stock price fell by 7% in extended trading due to its 2024 AI chip sales forecast falling short of investor expectations.

The company's projected AI chip sales of $4 billion, despite being $500 million higher, did not meet Wall Street's anticipations, trailing behind Nvidia's AI market success.

A significant portion of AMD's revenue from traditional server semiconductors is threatened by the rising demand for AI server chips.

AMD faces additional headwinds from an uncertain gaming market demand and declining revenue in the embedded segment.

Despite these market challenges, AMD's data center business reported a substantial 80% revenue increase to $2.3 billion.

For the second quarter, AMD's gross margin forecast exceeded analyst predictions.

AMD's first-quarter revenue slightly topped analyst projections at $5.47 billion, with adjusted per-share earnings of 62 cents.