If you're looking to buy a fast-growing company trading at an attractive valuation, there's no need to look further than Advanced Micro Devices (NASDAQ:AMD). The chipmaker has been delivering consistently terrific results quarter after quarter, and it kept that trend going when it released its Q1 report last week.

AMD's revenue and earnings blew past Wall Street's estimates. Non-GAAP earnings nearly tripled year over year to $0.52 per share, while the top line almost doubled to $3.45 billion from $1.79 billion in the prior-year period. This is a big step up from the way AMD ended 2020 -- and the company's guidance indicates that it has switched into a higher gear in 2021.

Let's take a look at the reasons why this tech stock could deliver substantial upside this coming year.

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AMD is getting better and better

AMD was originally expecting 37% revenue growth in 2021. Three months later, it bumped its full-year revenue growth forecast to 50%, citing robust demand across all its businesses. Just for the second quarter, AMD is guiding for 86% year-over-year revenue growth on the back of a strong showing across the computing and graphics and enterprise, embedded, and semi-custom (EESC) segments.

The computing and graphics business is benefiting from a spurt in PC (personal computer) demand, which is driving sales of the company's Ryzen CPUs (central processing units) and Radeon GPUs (graphics processing units). Additionally, AMD is taking market share away from its bigger rival.

CEO Lisa Su pointed out on the latest earnings conference call that the company's "revenue is growing significantly faster than the market, particularly in the ultrathin, gaming, and commercial segments." Su also added that AMD's revenue share in the client processor space has doubled in the past couple of years thanks to the company's expansion into high-end products and its technological advantage over Intel.

Meanwhile, the notebook market remains a happy hunting ground for AMD. The company has been delivering record mobile processor revenue for six consecutive quarters. That trend is likely to continue in the forthcoming quarters: AMD's latest Ryzen 5000 mobile processors are ramping up at twice the pace of their predecessors, which isn't surprising as the latest chips are expected to power 50% more notebook models this year compared to the Ryzen 4000 series.

AMD's graphics card business also delivered a robust performance last quarter despite stiff competition from market leader NVIDIA. AMD's revenue from its high-end Radeon 6000 graphics cards doubled over the previous quarter. The company is expecting to achieve significant sales growth of these GPUs by ramping up production in the forthcoming quarters.

Demand for AMD's data center graphics cards also increased during the quarter. The company is now preparing to launch its next-generation data center accelerators, which are expected to help sustain the segment's growth in the second half of the year.

All these tailwinds sent the computing and graphics business' revenue up by 46% over the prior-year period to $2.1 billion. The segment accounted for 61% of AMD's revenue last quarter, which means that it will keep moving the needle in a big way for the company thanks to share gains in the CPU market and better supply of graphics cards.

Meet the company's biggest growth driver

The EESC segment did the heavy lifting for AMD last quarter, registering 286% growth year over year. The segment added almost $1 billion in revenue over the prior-year quarter to finish Q1 with $1.35 billion in sales.

The EESC business' massive growth isn't surprising. AMD has a couple of really strong growth drivers there, including a new generation of gaming consoles and the company's growing prominence in the data center server processor market.

AMD management sees "significant demand for the latest generation Sony and Microsoft consoles" throughout the year. That's not surprising, as the latest consoles are in huge demand. Sony has sold 7.8 million units of the PlayStation 5 (PS5) console in the fiscal year that ended on March 31, outpacing the 7.6 million units that the PS4 sold in a similar time frame after launch.

It is worth noting that the PS5 was launched in November 2020 and has been hamstrung by supply constraints, which makes its initial sales numbers even more impressive. Sony expects to sell nearly 15 million units of the PS5 this fiscal year. The momentum could spill over into the following years given the huge number of console users expected to upgrade their devices.

Meanwhile, AMD's server processor revenue hit a record last quarter. Sales of the company's EPYC processors doubled over the year-ago period thanks to strong end-market demand and the superiority of its products over Intel. The company aims to double the number of cloud instances powered by EPYC processors this year to 400, driven by a solid customer base that includes key cloud players such as Amazon, Microsoft, Alphabet, IBM, Tencent, and Oracle.

The tailwinds listed above make AMD a growth stock that investors should look into given its trailing price-to-earnings ratio of just 34, which seems quite attractive given its terrific pace of growth.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.