Investors gobbled up Advanced Micro Devices' stock in after-hours trading on Thursday after the chipmaker reported better-than-expected profit and sales for the second quarter and projected continued sales growth for the rest of the year.
The company's stock was up 6 percent in after-hours trading. The value of AMD stock has soared in recent months, closing at $5.22 on Thursday, a four-year high for the chipmaker.
AMD reported a profit of $69 million in its second quarter, or 8 cents a share, which was driven in part by the sale of a majority stake in one of its testing and assembly facilities.
Adjusted for one-time gains and expenses, the company reported a loss of $40 million, or 5 cents a share, up nearly 70 percent from the same period a year ago. This beat analyst estimates of 8 cents a share.
Its revenue increased to $1 billion, up 9 percent from the same time a year ago.
The company also reported a return to operating profit for the first time in two years. AMD hasn't had a full profitable year since 2011.
"AMD is on a roll here," said Patrick Moorhead, an industry analyst with Moor Insight and Strategy. AMD is one of his clients. "This is about as excited as I've been about AMD in a couple of years."
AMD, which employs about 1,500 people in the Central Texas area, makes computer and graphics processors that are used in personal computers and other devices, such as servers and game consoles.
The company's formal headquarters are in Sunnyvale, Calif., but Austin is where most of its senior executives live and much of its engineering is done.
AMD said its second quarter was driven by demand for its semi-custom products, which are used in video game consoles, and graphics processors.
In the second quarter AMD unveiled a new line of Radeon RX graphics professors.
AMD CEO Lisa Su said based on the strength of its sales in the second quarter the company is "well positioned to drive growth and market share gains in the second half of the year."
The second half of the year is when AMD tends to make more money, as back-to-school and holiday shopping drives consumers to buy more PCs and video game consoles.
The chipmaker said it expects sales to increase by about 18 percent next quarter and that for the full year it estimates that its total sales will grow in the "low single-digit percentage" from last year.
AMD has struggled in recent years as PC sales have declined, and as its rivals Intel Corp. and Nvidia continued to grab a bigger market share in computer and graphics processors.
AMD is attempting to diversify its revenue by developing new markets for its graphics cards and processors. Virtual reality represents one market that AMD is aggressively pursuing.
Moorhead said he was particularly impressed that sales of AMD's computing and graphics processors increased 15 percent from the same quarter a year ago.
He said the true test of whether AMD is turning itself around is the company's new "Zen" architecture for computer processors. The company see much sales revenue from Zen products until next year.
"To me, a comeback is defined by Zen getting traction," Moorhead said. "I think we are on the cusp of a breakthrough. I don't think we're at a breakthrough just yet but we could be really close."