Advanced Micro Devices reported second-quarter earnings on Tuesday that beat Wall Street’s expectations on both the top and bottom lines, though shares fell more than 8 percent as investors weighed the results against sky-high expectations heading into the report.

The chipmaker posted earnings per share of $1.66 on revenue of $11.5 billion for the quarter, topping analysts’ projections on both measures. The company also issued a stronger-than-anticipated outlook for the third quarter, projecting revenue of between $12.7 billion and $13.3 billion, compared with analyst estimates of roughly $12.5 billion.

Data center sales, AMD‘s fastest-growing segment, climbed to $6.7 billion from $3.2 billion a year earlier, ahead of analysts’ expectations of $6.5 billion. The company’s client segment, which includes PC processors, generated $3.1 billion in revenue, also ahead of the $3 billion analysts had forecast.

Despite clearing the bar on nearly every metric, AMD shares dropped sharply in the session, a reaction traders attributed to the gap between the stock’s recent run-up and the scale of the beat needed to justify it. The earnings arrived shortly after AMD’s data center push was bolstered by a widely reported partnership with AI company Anthropic, which had raised expectations further ahead of Tuesday’s report.

Chief Executive Lisa Su struck an upbeat tone on the results, saying the company enters the second half of the year with strong momentum “as Epyc demand accelerates, Instinct deployments scale and Helios begins to ramp,” referring to AMD’s server processor line, AI accelerator chips and next-generation AI infrastructure platform.

The results place AMD alongside other major chipmakers navigating a market where investor expectations for AI-related growth have climbed sharply, leaving little room for even solid earnings beats to move the stock higher. Investors will next watch for how the stronger third-quarter guidance translates into results when AMD reports again later this year.