Advanced Micro Devices forecast third-quarter revenue above Wall Street estimates Tuesday, betting on upbeat demand for its artificial intelligence chips from businesses rushing to expand infrastructure to dominate the latest technology.

Shares of the Santa Clara, California-based company rose 2% in extended trading.

AMD's shares have climbed more than 40% this year, far outpacing a nearly 12% jump in the benchmark chip index, as investors bet on the company's ability to capitalize on the widespread use of AI.

Demand remains robust for AMD's advanced processors that power complex AI systems for Microsoft, Meta Platforms , generative AI leader OpenAI and other customers, with the company set to benefit from cloud giants bumping up their hefty spending plans for building AI infrastructure.

Meta has raised the bottom end of its annual capital expenditure forecast by $2 billion, to a range of between $66 billion and $72 billion. Similarly, Microsoft forecast a record $30 billion in capital spending for the first quarter of the current fiscal year to meet soaring AI demand.

The company expects revenue of about $8.7 billion for the third quarter, plus or minus $300 million, compared with analysts' average estimate of $8.30 billion, according to data compiled by LSEG.

The outlook does not include any revenue from AMD's AI chip MI308's shipments to China as license applications are currently under review by the U.S. Government, the company said.

The company said last month the Department of Commerce would review its license applications to export its MI308 chips to China and it plans to resume those shipments when licenses are approved, after U.S. curbs announced in April required it to obtain a license to ship advanced AI processors to China.

AMD had forecast a $1.5 billion hit to revenue this year due to these curbs, with most of the impact affecting the second and third quarters.