Advanced Micro Devices Inc. is flying high today, its stock up more than 10% in after-hours trading after the veteran chipmaker reported second-quarter results that comfortably beat expectations and posted strong guidance for the next quarter.

The chipmaker reported a profit before certain costs such as stock compensation of 18 cents per share on revenue of $1.93 billion. Wall Street had forecast earnings of 16 cents per share on revenue of $1.86 billion.

“AMD had a solid quarter in revenue and profit, with 26% growth and a 3% gross margin improvement,” said analyst Patrick Moorhead of Moor Insights & Strategy. “Like we saw in Q1, AMD set some revenue records in Q2.”

The company said its sales grew 26% from a year ago on strong demand for its Ryzen personal computer chips and its Epyc server processors. Revenue for both chips doubled from a year ago, AMD Chief Executive Lisa Su (pictured) said in a conference call with analysts.

AMD’s Client Computing Group, which includes the Ryzen chips, reported revenue of $1.37 billion, up 45% from last year.

“AMD set records in CCG with the highest client processor revenue in 12 years, doubling Ryzen notebook revenue,” said Moorhead. “In fact, this was the highest notebook revenues ever, driven by increased competitiveness, particularly with its Ryzen Mobile 4000 platform.”

AMD also posted a strong outlook for the current quarter. It said it’s expecting third-quarter revenue of $2.55 billion, well ahead of Wall Street’s $2.32 billion forecast.

One reason for the strong outlook is that AMD is expecting the PC market to grow even more this year, Su said in the call. The PC market has already benefited this year from more sales as a consequence of the coronavirus pandemic, and the shift to working at home.

Su said she thinks AMD’s embedded and semicustom chip business will also grow in the second half of the year with the launch of new video game consoles from Microsoft Corp. and Sony Corp. that use AMD components.

“We expect strong second-half semicustom growth as we read production to support the holiday launches of the new PlayStation 5, and Xbox Series X consoles,” Su said. “We do believe that the market is a little bit better than we thought 90 days ago, but we also believe that our product traction is strong, and we’re seeing that with our customer demand, so those are the reasons for the guidance.”

AMD’s results come just days after its main rival in the chipmaking space, Intel Corp., announced a six month delay with its seven-nanometer product roadmap. Intel has also made some big management changes, and that could give AMD an opportunity to take even more of its rival’s market share.

AMD also competes in the data center server market with its Epyc chips, and it’s making some strong gains there too. In recent months it has landed a number of deals with hyperscale cloud companies such as Amazon Web Services Inc. and IBM Corp., while server makers such as Dell Technologies Inc. and Hewlett-Packard Enterprise Co. have announced new systems based on the Epyc chips.

“I was pleased to see that Epyc server CPUs set records as it doubled revenue year on year,” Moorhead said. “I attribute most of this Epyc growth to cloud service, SaaS and HPC players embracing the platform more and more. It likely took share in the non-IoT server space.”

Photo: AMD Global/Flickr