This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Advanced Micro Devices Providing a Great Buying Opportunity

Stocks in this article: AMD INTC MSFT MU SNDK NVDA

NEW YORK (TheStreet) – Advanced Micro Devices (AMD) is roaring back and attacking the short-sellers right where it hurts the most -- in their pockets.

The stock, at around $4, is up 6% on the year to date, but trailing the tech sector's 11% gain. When you consider the 14% gain posted by chip sector, AMD seems like a laggard, right? But that's not why we're here.

On July 18, I stepped out on a limb and recommended AMD as a solid buy. This was after the company's lower-than-expected third-quarter guidance spooked investors into selling their shares. The stock opened the following trading day at $3.72, down 18.6%. It was a gross overreaction.

Read More: Would Bruce Springsteen Revel in Atlantic City’s Collapse?

At the time, I said,

"That the stock is now declining opens the door for new investors to capitalize on possibly the quickest 18% bounce they'll ever see.

Wall Street saw disagreed. It seems, however, that's exactly what's happening.

Since that recommendation three weeks ago, shares of AMD are back over $4, gaining more than 10%. It's the easiest 10% investors have ever made. Wall Street focused too much on the guidance and ignored the 24% year-over-year jump in revenue. Not to mention, management reversed last year's 9-cent loss with a 2-cent profit.

Here's the other thing: "The cat is now out of the bag," as the saying goes.

Wall Street now expects a horrible third quarter. This means all AMD has to do is match expectations for the shares to continue their uptrend. If management surprises analysts with beat and raise, these shares are likely to reach $4.80 before the year is over. From Wednesday's close, we're looking at gains of possibly 20%.

Read More: Cisco Drops on Job Cuts, Emerging Market Weakness

It's no longer the 1990s and growth in personal computers are not coming back -- this is despite what indicators say. The recent gains in both Intel (INTC) and Microsoft (MSFT) have been due (in part) to Microsoft ending support for Windows XP. This spurred a faster-than-expected refresh in PCs. But this will be short-lived. Rory Read, AMD's CEO understands this.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs