While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of Advanced Micro Devices (NASDAQ:AMD) gained 3% this morning after Canaccord Genuity resumed coverage on the semiconductor company with a buy rating.

So what: Along with the bullish call, analyst Matthew Ramsay planted a price target of $5 on the stock, representing about 23% worth of upside to yesterday's close. So while momentum traders might be turned off by AMD's price sluggishness over the past year, Ramsay's call could reflect a sense on Wall Street that the concerns surrounding its growth trajectory are becoming overblown. 

Now what: According to Canaccord, AMD's short- and long-term risk/reward trade-off are both quite attractive. "AMD's diversification strategy positions the company to drive solid top-line growth and a return to sustained profitability despite PC market headwinds," said Ramsay. "In fact, we are comfortable with the lower gross margin of recent sales, with shared R&D costs and minimal marketing expense for semi-custom gaming designs making this new business accretive at the operating line. Long term, ARM servers offer opportunity for reentry into a growing $12B+ market and an attractive call option on AMD shares. Nearer term, we believe consensus underestimates GPU share gain and new semi-custom opportunities." Given AMD's highly volatile shares and still-shaky competitive position, however, I'd wait for a much wider margin of safety before betting on those bullish beliefs. 

Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.