Shares of Advanced Micro Devices (AMD 0.92%), commonly referred to as AMD, charged out of the gate on Wednesday, gaining as much as 4.9%. However, investor pessimism soon won out, and as of 11:29 a.m. ET today, the stock was up just 0.4%.

The artificial intelligence (AI) chipmaker announced results that beat expectations, but investors eventually focused on the thorns rather than the rose.

Image source: Getty Images.

The devil's in the details.

AMD released its first-quarter results after the market close on Tuesday, and they were surprisingly strong. The company delivered record revenue of $7.4 billion, up 36% year over year, resulting in adjusted earnings per share (EPS) of $0.96, which climbed 55%.

To give those numbers context, analysts' consensus estimates were calling for revenue of $7.12 billion and EPS of $0.93, so AMD sailed past expectations.

Fueling the robust results was the data center segment, which generated revenue of $3.7 billion, up 57% year over year, driven by demand for the company's AI-centric Epyc central processing units and Instinct graphics processing units.

"We delivered an outstanding start to 2025 as year-over-year growth accelerated for the fourth consecutive quarter driven by strength in our core businesses and expanding data center and AI momentum," said CEO Lisa Su.

Wall Street has reservations

While investors were initially pleased, Wall Street analysts soon rained on AMD's parade. The company announced that it would take a charge of $1.5 billion in 2025 due to export restrictions on advanced chip sales to China.

Analysts at Jefferies noted that "AI growth is the primary metric for the stock, and on that front, estimates move lower." Citigroup analysts had similar concerns, noting that AMD expects a decline in its revenue from AI in the first half of 2025, while "almost every other company has its AI business increasing."

Despite the misgivings of some on Wall Street, a long-term outlook historically trumps any short-term market noise. And at just 22 times forward earnings (as of this writing), AMD remains an attractive way to profit from the AI revolution.