SANTA CLARA, Calif. — Shares of Advanced Micro Devices fell more than 7% on Wednesday after the chipmaker reported record second-quarter results powered by surging demand for artificial intelligence hardware, yet delivered a revenue outlook that left some investors wanting clearer evidence of accelerating returns from the multibillion-dollar AI spending wave.

AMD stock was last trading near $479.52, down about 7.53% or $39.06, after closing Tuesday at $518.58. The decline came after the shares had risen 7% in the prior regular session. The move was set to erase tens of billions of dollars from the company's market value as traders digested results that beat Wall Street estimates but failed to fully satisfy elevated expectations built up during a strong year for the stock.

The Santa Clara, California-based company posted second-quarter revenue of $11.5 billion, up 50% from $7.69 billion a year earlier and ahead of analyst forecasts around $11.3 billion. On a non-GAAP basis, diluted earnings per share reached $1.66, exceeding the $1.62 consensus. GAAP diluted earnings were $1.38. Gross margin expanded to 54% on a GAAP basis and 56% non-GAAP.

Data center revenue more than doubled to $6.7 billion, rising 107% year over year and accounting for 58% of total company sales, up from 42% a year ago. The segment's operating income reached $2.1 billion. Growth was driven by strong demand for AMD's EPYC server processors and Instinct AI accelerators. Client revenue rose 23% to $3.1 billion on strength in Ryzen processors, while gaming revenue fell 31% to $779 million due to lower semi-custom sales. Embedded revenue increased 19% to $977 million.

For the third quarter, AMD guided revenue to approximately $13 billion, plus or........

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