What happened Shares of Advanced Micro Devices (NASDAQ: AMD) rose 13.1% in July, according to data from S&P Global Market Intelligence. AMD, an ascendant force in both semiconductor CPUs and GPUs, had actually drifted lower for most of the month, as the technology sector experienced some headwinds ahead of earnings; however, the stock skyrocketed in July's final days following a strong July 27 earnings report, along with a raised guidance for the rest of the year. Images source: Getty Images. So what In the second quarter, AMD's sales surged 99%, with adjusted (non-GAAP) earnings per share of $0.63, up 250% -- both figures were well above analyst estimates. The company also raised guidance to 60% growth for 2021, up from initial guidance of 50%. Of particular note, the company's EESC (enterprise, embedded, and semi-custom) segment was up 183%, driven by the success of its EPYC data center chips. AMD previously had extremely low data center market share, but since the company's third-party foundry Taiwan Semiconductor Manufacturing surpassed main competitor Intel in producing leading-edge chips, AMD has been picking up momentum in this huge and growing market. Not only that, AMD's data center chips seem to have higher margins than AMD's other products. "As data center becomes a higher percentage of our business, that's a favorable mix for us," said CEO Lisa Su on the conference call with analysts. Oh, and new customer wins in Tesla infotainment systems and Google cloud data centers didn't hurt, either. Now what AMD is outgrowing the industry; as it takes market share, reaches greater scale, and the data center becomes a larger part of the business, management sees further growth in margins, targeting gross margins above 50% in the long run, up from 48% last quarter. Su also said the company sees tight supply and strong growth into 2022. Although AMDs stock looks expensive at around 45 times next year's earnings, it has always looked expensive over the last few years, even as the stock has gone on to market-beating gains. That's a testament to Lisa Su's leadership and the company's stellar execution -- a feature I don't see changing anytime soon. 10 stocks we like better than Advanced Micro DevicesWhen our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Advanced Micro Devices wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of June 7, 2021 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Billy Duberstein owns shares of Alphabet (C shares) and Taiwan Semiconductor Manufacturing. His clients may own shares of the companies mentioned. The Motley Fool owns shares of and recommends Advanced Micro Devices, Alphabet (A shares), Alphabet (C shares), Taiwan Semiconductor Manufacturing, and Tesla. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.Source