Chipmaker Advanced Micro Devices (AMD) reported its first-quarter earnings on Tuesday, meeting Wall Street's expectations but falling slightly short on sales. The company's sales outlook for the current quarter is in line with estimates. As a result, AMD's stock experienced a decline in after-hours trading.

During the March quarter, AMD earned an adjusted profit of 62 cents per share, in line with analysts' expectations. Sales for the quarter reached $5.47 billion, slightly below the expected $5.48 billion. While the company saw a 3% increase in earnings and a 2% rise in sales compared to the same period last year, the results were not enough to meet market expectations.

Looking ahead, AMD anticipates sales of $5.7 billion for the current quarter, with a margin of plus or minus $300 million. This projection is close to analysts' estimates of $5.73 billion. In the same quarter last year, AMD generated sales of $5.36 billion.

In a news release, AMD's Chief Executive Lisa Su expressed satisfaction with the company's strong performance in the first quarter. She highlighted the significant growth in the Data Center and Client segments, which both experienced over 80% year-over-year growth. Su attributed this growth to the increasing deployment of AI and the adoption of Ryzen and Epyc processors.

Despite the positive earnings report, AMD's stock faced a decline in after-hours trading, falling over 6% to $148.07. In the regular session on Tuesday, the stock dropped 1.1% to close at $158.38.

Notably, rival chipmaker Intel reported mixed Q1 results last week and provided lower guidance for the second quarter. AMD, on the other hand, has benefited from reports of major cloud service providers investing heavily in AI computing infrastructure. Additionally, the company's inclusion in the IBD Tech Leaders list has bolstered its position as a technology leader.

As the industry experiences increased demand for AI capabilities across various markets, AMD aims to capitalize on this trend and continue its successful execution in the data center business. Investors will closely monitor the company's performance and market dynamics in the coming months.