Why AMD Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Advanced Micro Devices (NYSE: AMD  ) have skyrocketed today by as much as 12% following a number of analyst upgrades.

So what: Merrill Lynch and Canaccord Genuity both boosted their respective ratings on AMD to "buy." Merrill more than doubled its price target from $2.50 to $6, and Canaccord did likewise by raising its valuation from $3 to $5. Both analysts are optimistic about the opportunity in next-generation game consoles.

Now what: With Microsoft's Xbox One and Sony's PlayStation 4 both using AMD chips, the next-generation consoles could help bring AMD back into the black, according to Merrill analyst Vivek Arya. There could be pent-up demand that could fend off competition from casual mobile platforms. Console generations last numerous years, so AMD's win could yield many years of recurring revenues.

Interested in more info on Advanced Micro Devices? Add it to your watchlist by clicking here.

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  • Report this Comment On July 11, 2013, at 4:18 PM, crashandburn45 wrote:

    With most of their restructuring costs taken in Q1, and an estimated EPS of -.12, look for AMD to beat estimates and become profitable again in the near future. I'm long AMD at least until the next iteration of consoles in 5 years.

  • Report this Comment On July 12, 2013, at 12:13 AM, GetMeTheBigKnife wrote:

    Not only did AMD surge in share price, the volume was an incredible 106,977,304 shares in today's trading session, the highest of the entire NYSE. AMD's average volume had been at 27 million shares.

  • Report this Comment On July 12, 2013, at 12:33 AM, GetMeTheBigKnife wrote:

    AMD was also the S&P's top performer at +11.81% change today.

  • Report this Comment On July 12, 2013, at 3:11 AM, rav55 wrote:

    The perception on the street has certainly changed. It would be interesting to know what the short interest is on AMD as of today.

    The console wins brings AMD either close too or just beyond profitability but the big expectation is the AMD invasion of Intel market share in servers using low wattage APU's and the synergy that the console wins bring to AMD's acceptance by not only the gaming industry but gamers in general. The entire gaming industry optimising for AMD HSA instruction's gives AMD a huge edge and crushes the Intel hegemony.

    AMD should consider a new logo, a Broom, for the clean sweep in x86 gaming.

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