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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Big Rally in Shares of Advanced Micro Devices

Stocks in this article: AMD SNE MSFT

NEW YORK ( TheStreet) -- Here's your fantasy investment outcome for today, and it's a doozy.

After a bad miss in earnings per share in the third quarter 2012 a certain well-known semiconductor company's shares tumbled more than 60%. You noticed, and as shares fell towards the eventual 52-week low you made a big speculation and bought 5,000 shares at $1.99 per share.

Then, yesterday, you noticed it opened about 6% higher from the previous closing price. You continued watching the ticker and by the time the price had soared to $4.44 you sold your shares.

Your profit was a tolerable $24,500 minus commissions for buying and selling. You may have some short-term capital gains tax to pay but that's a problem you don't mind facing.

This kind of windfall may have occurred to a number of investors who have been patiently holding shares of Advanced Micro Devices (AMD) for the past 10 months or so. AMD closed Thursday at $4.45.

The kicker Thursday was some analysts boosted the chipmaker's ratings and price targets, mostly due to its deals to supply processor chips for Sony's (SNE) PlayStation 4 and Microsoft's (MSFT) Xbox One.

As you can learn at the company's fascinating Web site, AMD is a force to be reckoned with.

It describes itself as "...a semiconductor design innovator leading the next era of vivid digital experiences with its groundbreaking AMD Accelerated Processing Units (APUs) that power a wide range of computing devices."

To that end, Sony's PlayStation 4 and Microsoft's Xbox One will be ready for eager gamers before the start of the holiday season. Both will utilize AMD's state-of-the-art processor chips for the game consoles.

This prompted an analyst at Bank of America Merrill Lynch to upgrade AMD to buy from underperform and increased its price target to $6 from $2.50.

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