Advanced Micro Devices, Inc. (NASDAQ:AMD) has made an impressive comeback to profitability this year with the company reporting a 23% year over year revenue increase for the third quarter financial reports. The company realized a revenue scale of $1.31 billion for the period against a projected flat growth of $1.21 billion. Analysts attribute this profitability to the increased demand for the company’s chips in the game console industry. During a conference call to announce the third-quarter earnings, AMD President and CEO, Lisa Su, expressed more optimism about the company reporting higher annual revenue at the end of the year.

What prompted the game console demand?

The company president was also quick to note the significant influence the semi-custom (game console) chip making business had on the overall company profit. The business division is reported to have contributed $835 million revenue and which represents a 31% jump in profitability. This demand for game consoles received a major boost from gaming giants Microsoft and Sony that are both on the verge of refreshing their consoles.

Microsoft relied on the AMD’s chips as it braces itself for the launch of Xbox One S. On the other hand, Sony engaged the services of AMD in the production of the PlayStation 4 Pro and the PlayStation 4 with 4K resolution. The chipmaker’s revenue would have been even higher had it won the bid to produce chips for Nintendo’s new switch console.

Future prospects

To catch up with competition and secure future revenue sources, the company has announced plans to ramp up its data center business. This announcement was backed up by AMD’s deal with China’s Alibaba that will soon start using AMD’s pro graphics within its infrastructure. The revamp of the data centers is also said to be geared towards AMD’s realization of deep learning and Artificial Intelligence system production goal

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Effects on the capital markets

The comeback to giant profitability and promising prospects for the company has skyrocketed AMD’s share price. The fact that it has been voted the best-performing stock on the Philadelphia Stock Exchange oozes analyst’s optimism about its future prosperity and trust in the management’s decision making.