AMD's first-quarter results were better than expected mainly due to the sales of processors that power both the Xbox One and the PS4. AMD announced revenue for the first quarter of 2014 of $1.40 billion, operating income of $49 million and net loss of $20 million. The company reported non-GAAP operating income of $66 million and non-GAAP net income of $12 million, or $0.02 per share.

"AMD continued our momentum by building on the solid foundation we set in the second half of 2013, further transforming the company," said Rory Read, AMD president and CEO. "Backed by our powerful x86 processor cores and hands-down best graphics experiences, we achieved 28 percent revenue growth from the year-ago quarter. We are well positioned to continue to grow profitably as we diversify our business and enable our customers to drive change and win."

The Computing Solutions segment's revenue decreased 8 percent sequentially and 12 percent year-over-year, due to decreased client unit shipments.

Operating loss was $3 million, an improvement from an operating loss of $7 million in Q4 2013 and $39 million in Q1 2013 driven by lower operating expenses.

AMD's Graphics and Visual Solutions segment revenue decreased 15 percent sequentially and increased 118 percent year-over-year driven largely by semi-custom SoCs. GPU revenue increased sequentially and year-over-year due to strong demand for the AMD Radeon R7 and R9 family of products.

For the second quarter of 2014, AMD expects revenue to increase 3 percent, plus or minus 3 percent, sequentially.

AMD is also planning this year to launch low-power server chips to compete in data centers against Intel's high-end Xeon processors.