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What's going on with AMD (AMD +14.4%)? The chipmaker's shares have taken off on volume that's 5x...

What's going on with AMD (AMD +14.4%)? The chipmaker's shares have taken off on volume that's 5x its daily average, even though no major news has hit the wires. Wells Fargo (Outperform) wrote this morning AMD has launched two new chips for its high-end FX desktop CPU line, and that its CPU pricing seems to be stabilizing, but it seems unlikely that's responsible for today's huge move. 16.9% of AMD's float was shorted as of April 15. Update: As SA commenters note, Intel buyout rumors appear to have played a role. Considering the antitrust issues, this rumor is even harder to swallow than the ones about Samsung and Qualcomm.
Comments (13)
  • Stock Market Mike
    , contributor
    Comments (2439) | Send Message
     
    If I had to guess - options plays. A few weeks back everyone was betting on AMD hitting $3 in may? $3 contracts were worth 0.06 - today 0.36, and $3.5 contracts worth 0.02 peaked at 0.12 - a good way to make 6 times your money?

     

    AMD is a stock that tends to run hard when it runs. Knowing that, I'm sure many funds are happy to help it along. Even if it costs them a bit on the shares, the leverage that the options provide is astounding. If it runs further from here, the multiples will be far higher than 6x.

     

    Other tech stocks don't run nearly as hard. I've been watching MRVL for a while too... in the last month and a half it must've been knocked back from resistance points at least 40-50 times. Today it tried to reach $11 four times, and selling overcame it each time. Funds are divided on how to make money on that one, although I did think the push downward to $9.50 was brilliant - MRVL is range locked between $10-11 at the moment, and has been for nearly 2 months... but at $9.50-9.70 the $10 calls were going for 0.06. They were worth a lot more when MRVL went from $9.50 to $10.66 in 4 days.

     

    Edit: Anyone else notice KKD today? It's being shoved hard, far below the lower bollinger band. Might be the same sort of play happening, although options volume hasn't spiked yet.
    1 May 2013, 04:20 PM Reply Like
  • zubikov
    , contributor
    Comments (99) | Send Message
     
    Three days of large, consistent up moves, hit a tipping point today and saw a humongous short squeeze after lunch. The report last week was encouraging, clearly the company is full steam into the post-PC strategy. Fears of running out of cash are subsiding, management team is regaining trust. With all of that, I'm sure some big players stepped in this afternoon as well.

     

    It's hard to explain why the exact timing, but let's face it, this stock had too much of a negative sentiment, with too much potential and good news on the horizon. It was a matter of time before a breakout day.

     

    Oh btw, it's a $2B established US chipmaker. Just say that outloud and think about how ridiculous that sounds in the long run.
    1 May 2013, 04:29 PM Reply Like
  • jbriano
    , contributor
    Comments (15) | Send Message
     
    Too many people calling it dead in the water for too long. At some point, the contrary play is going to pay off.
    1 May 2013, 04:53 PM Reply Like
  • toonies
    , contributor
    Comments (437) | Send Message
     
    hUMA. And maybe some other related things to this architecture. Price is still very nice against what it will be in the end of this year I believe. Kaveri will prepare hard days for Intel.
    1 May 2013, 05:02 PM Reply Like
  • Dexterdv
    , contributor
    Comments (2) | Send Message
     
    No major news? I though they "officially" announced that they will be using the AMD processors on both next generation consoles? Even if the next generation consoles don't exceed the expectations of the current generations sales, having a company with a $3 stock on something so huge is bound to go up.
    1 May 2013, 05:36 PM Reply Like
  • oneotherfool
    , contributor
    Comments (228) | Send Message
     
    I'm sure they meant no major news for today's rally specifically. The consoles news was known prior to last CC.
    1 May 2013, 08:59 PM Reply Like
  • vampirr
    , contributor
    Comments (34) | Send Message
     
    Presentation of hUMA, more details released about Kaveri, G series SoC details released and GE platforms made contract with AMD to use their chips/SoC's.
    1 May 2013, 05:36 PM Reply Like
  • Sal Marvasti
    , contributor
    Comments (1364) | Send Message
     
    The real jump may have bin the Intel bid rumour. There is implicit a knowledge that anti trust no longer relevant for Intel bid.
    It would be win win according to wall street journal
    1 May 2013, 08:12 PM Reply Like
  • itbj2
    , contributor
    Comments (186) | Send Message
     
    I am not sure that will fly with the anti trust folks. Since Intel would easily over power Nvidia and would quickly become the only source for server and PC processors as well as graphics chips.

     

    It also does not make much sense from AMD's stand point. They have a great low power processor line up and even better products for next year.

     

    People are just trying to figure out why the stock went up and explain why they missed it.

     

    The writing has been on the wall for the past 6 months. They just did not read it. Oh well too bad for them.
    1 May 2013, 10:21 PM Reply Like
  • toonies
    , contributor
    Comments (437) | Send Message
     
    Good for them which did not ignore the writing. Exhibition of Xbox in late May will be surprise for the public I mean. But PS4 will be very succesful too. I am waiting for latest Quantic Dream's game which will be released for PS4 in the end of 2013. This game has developed more than 1 year for the PS4 in accordance with PS4 specification/blueprint. And because new Xbox will be inside powered by same solution by AMD, maybe this game will be later available for Xbox too, if Sony will cancel exclusivity. Nice for game developers, nice for gamers. This year we will hear or read a lot of about new AMD's contracts/wins in areas that only few investors were able imagine a year before. AMD does not need Intel "care" today. I see AMD's stock price higher next year then can be reached by Intel's bid now.
    2 May 2013, 04:30 AM Reply Like
  • itbj2
    , contributor
    Comments (186) | Send Message
     
    Completely agree with you.
    2 May 2013, 05:21 AM Reply Like
  • Ronin16
    , contributor
    Comments (7) | Send Message
     
    "Rumor" has it that Intel is interested in buying,it swirled around traders' desks the last 2 hours, what would AMD look like if they did get bought out? hmmm longs are gonna be happy.
    1 May 2013, 09:05 PM Reply Like
  • Ashari
    , contributor
    Comments (221) | Send Message
     
    yeah many people missed it, but here it is :
    "GE Platforms adopts latest AMD processors for industrial computing"

     

    http://bit.ly/18dd5Kk

     

    GE Intelligent Platforms is a company with a $145 billion revenue, this could potentially be huge for AMD but at the moment, above all, it validates Rory's plan of expanding into SoC business.
    I believe once this news is digested by the market, AMD will be up a lot more than 15%.
    2 May 2013, 04:56 AM Reply Like
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