AMD (AMD) reported its fiscal third quarter earnings on Tuesday, meeting expectations on earnings per share and beating on revenue. But Wall Street wasn't too keen on the company's Q4 revenue outlook, which it said will come in between $7.2 billion and $7.8 billion. Wall Street was looking for $7.55 billion.

The chip maker's stock fell more than 5% immediately following the announcement on fears of slowing AI growth for the company. Despite that, CEO Lisa Su said demand for the company's offerings is strong.

"Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute," she said in a statement.

For the quarter, AMD saw adjusted earnings per share of $0.92 on revenue of $6.8 billion. Wall Street was anticipating adjusted EPS of $0.92 on revenue of $6.7 billion, based on analyst consensus estimates from Bloomberg. The company saw EPS of $0.70 per share 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 versus expectations of $3.46 billion, and from $1.59 billion in Q3 2023.

The company’s second-largest segment, its Client business, which involves sales of CPUs for desktops and laptops, topped $1.9 billion, versus expectations of $1.71 billion and up from $1.45 billion last year. AMD’s gaming segment, however, collapsed 69% year-over-year, bringing in revenue of $462 million versus $1.5 billion in the same period last year.

The gaming segment includes sales of AMD’s Radeon graphics cards for laptops and desktops and custom chips for consoles like the Xbox and PlayStation.

Graphics cards for gaming PCs and console sales have fallen since their peak during the pandemic, which saw consumers buying up devices to help them fill their nights and days when they were stuck inside on the couches.

AMD’s earnings come less than a month after the company detailed three of its upcoming chips including its 5th Gen AMD EPYC central processing unit (CPU) for servers, its Instinct MI325X AI chip, and the Ryzen AI Pro 300 for AI PCs for enterprise users.

The chip company's stock price is up 65% in the last 12 months, beating out the broader S&P 500 (GSPC), which is up 36%, and clobbering struggling Intel (INTC), whose stock price is down a staggering 34%. Nvidia, meanwhile, continues to surge, climbing an eye-watering 246% in the last year.

AMD is Nvidia’s biggest rival in the AI chip space. Of course, with Nvidia estimated to have between 75% and 90% of the market, that’s not saying much.