Advanced Micro Devices (NASDAQ: AMD) is anticipating a substantial increase in revenue driven by its burgeoning data center and gaming sectors. The company's gaming revenue reached $3.9 billion last year, marking a 51% rise compared to the previous year, fueled by the success of its semi-custom processors for the PlayStation and Xbox consoles.
Historically, the company has relied on its gaming console business as a significant growth driver, with a notable 65% revenue increase in its semi-custom segment to $3.33 billion following the PlayStation 5 and Xbox launches in November 2020. This trend continued into the next fiscal year, with revenue doubling to $7.1 billion.
AMD is well-positioned for future growth as both Sony and Microsoft prepare to release new consoles by the 2027 holiday season, providing AMD with ongoing opportunities for revenue enhancement through its semi-custom processor agreements. Additionally, its data center segment is forecasted to experience over 60% annualized revenue growth, backed by collaborations with firms like OpenAI and Meta Platforms.