AMD's revenue outlook disappoints investors, leading to a sharp drop in stock price after hours.

AMD's latest sales outlook has disappointed investors, indicating that the market has higher expectations for returns from the global expansion of AI data centers. AMD stated in a release on Tuesday that it expects third-quarter revenue to be $13 billion, with a variability of $300 million either way. Although analysts had an average expectation of $12.5 billion, forecasts from some Wall Street firms, according to compiled data, were significantly higher than $13 billion. After the earnings report was released, AMD's stock fell approximately 6% in after-hours trading. The stock closed at $518.58 in New York on Tuesday. The market reaction suggests that AMD needs to demonstrate faster growth to support its current valuation. So far this year, as AMD has become a major competitor to NVIDIA in the AI processor sector, its stock has more than doubled, outperforming the broader market.