While my last AMD post went into some of the flaws of bitCoin mining, esp those that prevent fair pricing of the bitCoin (anti-competition in many ways due to hardware inavailability), it sounds like ASIC-like chips designed for script coins are headed for the market, which will focus on LiteCoins. That essentially removes AMD from being a virtual currency mining play, making their current boost in GPU sales very temporary.
That said, LiteCoins/Bitcoins fell a great deal over the weekend /4days since my last note, from $36 to $23, bitcoins from $1k to $600, and AMD caught an 8am-Monday-downgrade. Those are pretty hefty factors for a speculative investor GROUP.. the group presumably holding the stock. However, AMD has scarcely budged. Of course, the market has moved up without it.
I think the timing of the downgrade was very poignant; it came over the weekend and by the end of last week there were a bunch of retail investor AMD bulls (including myself). AMD gave a good shake yesterday challenging those with stops in place. Recently, many stocks have emerged from a good shake to really rise.. see DDD from $55 and NFLX from 285.
As AMD holds the 50 and 200ma it will be interesting to see if it can continue the traction towards the end of this week. Even if AMD's liteCoin earnings are temporary, they're on the books and will give AMD a boost to fuel the exciting new businesses in the micro-server market. And, as consoles remain scarce, despite the concerns noted by the downgrade, selling 10M chips in this market by March will be a huge accomplishment.
I think the secular bears would most like to draw attention to the fact these two successes can be seen as "temporary". However, if AMD starts to look successful in the server market once again, and the VZ deal is certainly an early sign, these two jabs will be followed by an uppercut for the shorts with NINE days to cover. Wow.
The shift from GPU's to ASIC-like chips for LiteCoins keeps my estimate to the single digits, but AMD could still have a good bit of upside in 2014. The sudden analyst outbursts around the 50/200ma should raise more than a bit of suspicion as the market tires to "keep a lid" on AMD. The fact the downgrade only caused about 1.5% of damage in 2 days in such a "speculative" play should also raise some eyebrows.
The fight is on for AMD over the 200ma/50 and the way its held up after a longwinded downgrade, esp with the volume of recent, makes AMD look pretty revved up as of the close Tuesday.
Disclosure: I am long AMD.
Additional disclosure: and may add if it begins to move up tomorrow