Shares of Advanced Micro Devices Inc. surged again Wednesday, putting them on course for their biggest weekly gain in four months, as upbeat comments from Apple Inc. and from a broker’s technology conference helped reignite investor interest.
The chipmaker’s stock
was humming along nicely, soaring nearly eightfold off last year’s low in January, until it got clocked on May 2 by a good-but-not-great first-quarter report. After bouncing slightly since then, it starting taking off again this week. The stock shot up as much as 7.7% intraday, before paring gains to close up 2.9%. That follows a 7% jump on Tuesday and Monday’s 3.1% rally.
The 13.6% gain over the past three sessions puts the stock on course for the biggest weekly gain since the stock soared 14.7% during the week ending Feb. 3.
Helping provide a spark for the rally, Apple
said Monday at its Worldwide Developers Conference that its new $5,000 iMac Pro will sport AMD technology.
“We’ve had a tremendous amount of very positive coverage from Monday’s Apple announcement,” said Chris Hook, senior director of marketing for the Radeon Technologies Group at AMD in a telephone interview with MarketWatch. “We’re thrilled to have Apple as a customer.”
But also helping fuel the rally were reports of product sellouts, helped by increasing demand from gaming enthusiasts and cryptocurrency miners. Read more about cryptocurrencies and how they are mined.
“We’re seeing a tremendous amount of demand from the gaming space, as well as from the crypto[currency] space,” Hook said, as the products are “perfectly suited” for those market segments.
RBC Capital analyst Mitch Steves said he expected the demand from cryptocurrency miners for low-to-mid end graphics procession units (GPUs), such as AMD’s, have increased recently, and will remain in high demand, “given the return on investment is material” for the mining community.
Regarding reports of sellouts, Hook said products are still available at different sales venues, but he did acknowledge that “fewer SKUs were available.” SKUs are shop keeping units, and refer to individual items for sale, including different models and specific versions of each model.
At Bank of America Merrill Lynch’s global technology conference Tuesday, AMD Chief Technology Officer Mark Papermaster helped address some recent concerns over competition, primarily from fellow graphics chip maker Nvidia Corp.
“I think the short answer is that the product competitiveness drives share gain, right?” Papermaster said, according to a transcript provided by FactSet. “So when you look at Polaris, we released it last year and it’s targeted right smack in the mainstream….We’ve gained five [percentage] points of share since the release of Polaris.”
Papermaster said the company also sees an opportunity in the autonomous driving market with its new Vega lineup, after Tesla Inc.
recently mentioned that AMD products were being considered.
Despite this week’s rally, AMD shares have still lost 5.1% over the past three months, while Nvidia’s stock has run up 51.0%, the PHLX Semiconductor Index
has climbed 14.5% and the S&P 500 index
has gained 2.7%.