CEO Rory Read appeared on CNBC's Fast Money (video) yesterday evening to talk up AMD's (AMD +6.3%) efforts to lower exposure to a PC market featuring soft industry demand, short product cycles, and intense competition from Intel/Nvidia.
Read, in reference to his company's PS4/Xbox One design wins: "What we're trying to do is create these long-term strategic relations .... Those are the plays that are going to create the long-term transformation of AMD." In addition to consoles, AMD is looking to create partnerships in the server and embedded computing markets.
He asserts only 4% of AMD's revenue came from non-PC applications when he joined the company, and that over 30% do so now. Long-term, AMD wants to derive half its revenue from non-PC markets.
At the same time, Read argued AMD, whose PC CPU ops have historically been heavily exposed to the low-end consumer notebook market (hit hard by tablets), has "greenfield" opportunities in the desktop and commercial markets. The company recently launched low-end desktop CPUs based on its 28nm Kabini architecture (previous), with the goal of enabling high-volume sub-$300 systems for emerging markets.
With over 1/6 of the float shorted as of Feb. 14, Friday short-covering is likely contributing to today's gains.