Image source: AMD.

What: Shares of Advanced Micro Devices (AMD 0.33%) rose 12.5% in June, according to data from S&P Global Market Intelligence. The big news for AMD during the month was the announcement and launch of the Radeon RX 480, the company's first graphics card based on its Polaris architecture.

So what: AMD announced the RX 480 on June 1, confirming that its first Polaris graphics card would be a mainstream part priced at $199. Rival NVIDIA (NVDA -0.90%) had previously announced two high-end cards based on its new Pascal architecture, leaving AMD with an opening to steal market share at lower prices.

The RX 480 launched on June 29 to positive reviews. NVIDIA will almost certainly launch a competing mainstream product in the coming months, but for the time being AMD has a good chance at picking up some market share. The company shipped just 22.8% of discrete graphics cards during the first quarter, according to Jon Peddie Research, down from around 40% in the same period two years ago.

While AMD's turnaround efforts have yet to positively affect its financial results, the launch of the RX 480 has helped drive optimism that the company is on the cusp of returning to growth. This optimism drove the stock higher in June.

Now what: While it appears likely that Polaris will help AMD claw back some market share from NVIDIA, a return to profitability may still take some time. During AMD's latest quarter the company posted at $109 million net loss, driven by weak sales of CPUs, GPUs, and console SoCs. That's a deep hole that AMD will need to pull itself out of, and the success of both Polaris and Zen, the company's upcoming CPU architecture, will likely be required.

AMD's turnaround is no longer a long-shot in the eyes of investors, evidenced by the 12.5% jump in the stock price in June and the more than 70% rise so far this year. But AMD will need to meet expectations for those gains to stick around.