Advanced Micro Devices Inc. tumbled in late trading after giving a disappointing outlook for its data center business, an area where it’s struggling to catch up with AI computing leader Nvidia Corp.

AMD is trying to persuade some of the biggest companies in the world to include its AI products in their data centre expansion plans. It’s still playing catch-up with Nvidia in this endeavour.

Despite a strong performance in its financial performance, AMD expects first-quarter data center sales that may fall short of expectations, raising doubts about AMD's competitiveness amid Nvidia's dominance in the AI GPU sector.

Advanced Micro Devices forecast first-quarter revenue above Wall Street estimates on Tuesday, betting on strong demand for its AI chips as Wall Street's technology heavyweights build infrastructure to dominate the emerging technology.

Shares of the Santa Clara, California-based company rose more than 3% in extended trading. AMD's shares fell about 18% last year, underperforming Nvidia's more than 171% rise. The chipmaker has been struggling to keep up with demand for its advanced processors that power complex AI systems for Microsoft,

Computer processor maker AMD (NASDAQ:AMD) in Q4 CY2024, with sales up 24.2% year on year to $7.66 billion. Guidance for next quarter’s revenue was better than expected at $7.1 billion at the midpoint,