Shares of

Advanced Micro Devices

(AMD) - Get Report

were rising Tuesday, following an upgrade by a Wall Street analyst and bullish comments by one of the chipmaker's senior executives.

Bear Stearns analyst Gurinder Kalra said that pressure on AMD's microprocessor prices is lessening and that its inventory situation had improved over the past few months.

According to Kalra, price pressure on AMD will be less severe in the second half of the year, with the company "willing to walk away from low margin business" and benefiting from a rapid shift toward dual-core processors.

And Kalra said the company could experience considerable upside in processor shipments, particularly for notebooks. Kalra said he expects


(DELL) - Get Report

to ship two AMD-based notebook models by the fourth quarter of the year.

Dell recently said it would sell desktops and servers featuring AMD chips, ending its long practice of using only


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Kalra upgraded AMD shares to an outperform rating from a previous peer perform rating, and raised his year-end price target on the stock to $29. Bear Stearns makes a market in AMD shares and has provided non-investment banking services to the company whitn the past 12 months.

Shares of AMD were up 6.4%, or $1.49, to $24.89 in midday trading Tuesday.

The company's shares are down 29% since mid-May, with investors turned off by a slowing PC business and a fierce price war between AMD and Intel.

According to a


news report, AMD Commercial Business Vice President Marty Seyer told journalists that the company believes it can take 40% of the worldwide server market in units by 2009.

AMD has previously stated that its goal is to capture 30% of the overall market supplying microprocessors for computers of all types including servers, desktop PCs and laptops in the next couple of years, up from roughly 20% today.

Seyer was in Shanghai for the opening of a new research and development facility that the company is opening in the Chinese city. According to AMD, the multimillion dollar facility will employ hundreds of people and focus on next-generation mobile technology.