Advanced Micro Devices (AMD -2.69%) shares have been stuck in the proverbial mud since their impressive rally in 2016 and early 2017. The company's business has benefited from a rejuvenated lineup of personal computer processors, a growing gaming market, and a re-entry into the market for data center processors. 

The company's business has also enjoyed a nice boost in revenue from the boom in cryptocurrency mining activity, which drove a non-trivial increase in its graphics processor sales. 

An AMD EPYC processor.

Image source: AMD.

Recently, there has been some investor concern around graphics processor-based cryptocurrency production (also known as "mining") dying down as the prices of the cryptocurrencies that are commonly mined by graphics processors have come down. That phenomenon, coupled with concerns around companies developing specialized chips to mine these cryptocurrencies (such as Ethereum), has led to a decline in AMD's stock price. 

However, analyst Kevin Cassidy with Stifel Nicolaus (via CNBC and Marketwatch) wrote in a new research note that "the market has oversold AMD shares based on alternative crypto-currency mining solutions coming to market." 

Let's take a closer look at what the analyst had to say. 

Channel refill imminent

Cassidy makes the following argument: "We believe that pent-up demand, as reflected by inflated retail costs for GPU cards, and the need to restock inventory channels due to limited supplies are likely to continue to boost GPU shipments, despite the potential for softer cryptocurrency demand."

The analyst further notes that AMD recently said that cryptocurrency-specific graphics processor shipments made up a "mid-single digit percentage" of its revenue in its last fiscal year (though I'd counter that it's hard for AMD to know for certain whether a graphics card sold through retail channels is being used for cryptocurrency mining or for gaming). 

EPYC server ramp, PC share gains

Beyond attempting to allay fears about cryptocurrency-related demand falling off, Cassidy also argues that AMD is poised to gain additional share in the personal computer market, as the company now "has a full line-up of PC CPUs." 

While it's true that AMD now has a full lineup of PC CPUs based on its newer Zen architecture (which are more competitive than what AMD was previously fielding), the reality is that AMD did have a full lineup of PC CPUs prior to the launch of the company's latest Ryzen Mobile processors (though its mobile parts during 2017 were based on its Excavator architecture, which was much less competitive than its current Zen architecture). 

Moving on, it's worth noting by way of background that AMD was once a non-trivial player in the market for data center processors. However, AMD effectively exited this market for years, as its prior offerings based on its ill-fated Bulldozer CPU architecture simply weren't competitive. AMD has re-entered the market with chips based on its new Zen architecture (called EPYC), which delivers substantially better performance and power efficiency compared to the prior-generation Bulldozer parts. 

Cassidy, per Marketwatch, "recommends owning AMD shares before the company begins ramping up revenue for its Epyc server processor later this year" and has a $13 price target on the stock. As of writing, AMD shares are trading at $10.18, so Cassidy's price target represents 27.7% upside from current levels.