The chipmaker Advanced Micro Devices (AMD) announced its fourth-quarter 2023 results on Tuesday, reporting earnings that met expectations but providing lower guidance for the current quarter, which fell short of analyst estimates. This caused a significant drop in AMD's stock price during after-hours trading.

AMD, headquartered in Santa Clara, California, delivered an adjusted earnings per share of 77 cents on sales of $6.17 billion, aligning with analyst projections. This marked a robust 12% year-over-year surge in earnings and a commendable 10% uptick in sales.

While the company's performance in the fourth quarter was solid, its forecast for the current quarter didn't meet Wall Street's expectations. AMD predicted sales of $5.4 billion, below analysts' estimates of $5.73 billion.

CEO Lisa Su underscored the achievement of record quarterly sales of high-performance data center processors, attributing it to the escalating demand for these products. However, she also pointed out that the company foresees a flat sales trajectory in its data center segment in the first quarter. This is due to a robust increase in data center graphics processing units, which will offset a seasonal decline in server sales. Furthermore, AMD anticipates sequential sales declines in its client, embedded, and gaming segments, with a significant double-digit percentage decrease in revenue from semi-custom chips.

Following the announcement, AMD's stock price fell more than 6% to $161.06 in after-hours trading, after a 3.2% decline during the regular trading session on Tuesday. This news understandably disappointed investors who had been optimistic about AMD's potential in the data center and artificial intelligence markets. Despite being on the IBD Tech Leaders list, signifying its growth potential, investors are eager to see whether AMD can meet its guidance and take advantage of growth opportunities in the data center segment.