April 30 (Reuters) - Advanced Micro Devices ( AMD ) 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.

Shares of the Santa Clara, California-based company fell 3%

in extended trading.

Enterprises rushing to adopt generative AI have prioritized

spending on AI server chips, hitting demand for traditional

server semiconductors, which constitute a large portion of AMD's

revenue. These processors cannot effectively handle the complex

tasks associated with AI.

While some of AMD's central processors are used in

conjunction with AI chips, the ratio is skewed in favor of the

more advanced processors.

AMD trails front-runner Nvidia ( NVDA ) in the booming

market for artificial intelligence server semiconductors, where

Nvidia ( NVDA ) commands about 80% of the share.

Uncertain demand from the gaming market has further hurt

AMD. Personal computing and console gaming revenue growth is

expected to remain below pre-pandemic levels through 2026,

according to research firm Newzoo.

Weakness has also evaded AMD's embedded segment, which

caters to markets such as automotive and industrial. Ongoing

inventory corrections have hit revenue from this segment as

clients clear out a build-up of chips.

The company forecast revenue of about $5.70 billion, plus or

minus $300 million, for the second quarter, in line with

analysts' average estimate, according to LSEG data.

It reported revenue of $5.47 billion for the first quarter,

compared to analysts' average estimate of $5.46 billion.