Updated from Nov. 11Aided by an upgrade from Merrill Lynch, shares of Advanced Micro Devices ( AMD) were up almost 2% early Friday ahead of the company's annual meeting with financial analysts. The stock added 31 cents, or 1.7%, to $18.90 in premarket trading. Merrill analyst Joe Osha upped his rating on AMD from neutral to buy, saying he expects the chipmaker to keep expanding its profit margin and gaining share against Intel ( INTC) for at least another year. Osha called Intel's own microprocessor plan "troubled." "AMD's stock is already up 59% off the bottom, and our shift in stance may look late," acknowledged Osha. But he thinks there's room for more upside, noting that AMD has taken advantage of several strategic mistakes made by Intel. Chief among them are Intel's decision to focus on clock speed in its Pentium 4 chip. "AMD's Athlon core was designed with less emphasis on raw clock speed and more emphasis on size and efficiency, which in retrospect looks like a smart decision," wrote Osha. Intel has also been hurt by its late introduction of a server chip able to compete with AMD's popular Opteron silicon, he added. One potential worry for Sunnyvale, Calif.-based AMD is Intel's renewed aggression in the flash memory business. However, Osha believes that AMD should be able to compensate for share losses there with gains in its higher-margin microprocessor line. The upgrade from Merrill comes after a similar move on Wednesday from Lehman Brothers' Tim Luke, who hiked his rating on AMD from equal weight to overweight. He cited similar reasons to those named by Osha, saying AMD should see improving margins from share gains in microprocessors and manufacturing gains, offsetting lower sales in flash.