Advanced Micro Devices Inc., the second-biggest maker of computer processors, gave a lukewarm revenue forecast for the current period, weighed down by lackluster demand for chips used in video game hardware.

AMD said its closely-watch Data Center segment grew 80% on a year-over-year basis thanks to sales of its MI300 AI chip, which competes with Nvidia's AI graphics processors.

Shares of Super Micro Computer, AMD, and Nvidia erased a collective $143 billion in market value on Wednesday.

Advanced Micro Devices forecast AI chip sales on Tuesday that failed to impress investors, knocking its stock down about 7% in extended trade. Chief Executive Officer Lisa Su told analysts on a conference call that AMD expects AI chip sales of roughly $4 billion for 2024,

AMD, which makes chips for the PS5, Xbox, and Steam Deck, reports a 48% year-over-year drop in gaming revenue for Q1.

AMD announced its projection for AI chip sales in 2024 on Tuesday, but the figures failed to meet investor expectations, resulting in a sharp decline of approximately 7 per cent in the company's stock during extended trading.

Advanced Micro Devices and Super Micro Computer led a selloff in chip stocks on Wednesday after their earnings disappointed investors, who had piled into the sector on hopes rising AI investments would boost demand.

Advanced Micro Devices beat first-quarter revenue estimates by a small margin on Tuesday as tepid demand for semiconductors used in traditional data centers added to weakness in the market for gaming chips.