Advanced Micro Devices (NASDAQ:AMD) has had a great ride over the past three months, gaining as much as 70% from the $10 handle. On a previous article on the company (link here), I said that short sellers would be forced to cover, and it will be one of the reasons for AMD's rise.
Well, I was wrong. Short sellers have not covered (yet). In fact they have remained complacent, maintaining their positions all the way up.
As the latest short data depicts above, short interest in AMD shares is about 172M, from the previous 174M count.
One has to scratch his/her head as to why the short crowd insists on keeping these positions open. I understand that many of these positions are unwinded as the stock goes up, only to open again at higher price points, but that still means everyone has lost money who has shorted AMD over the past year or so. In fact there's probably no one who can claim they made money shorting AMD over the past year except on an intraday basis.
First quarter revenue for AMD was up 40%, and the company is guiding Q2 revenue will increase 50% Y/Y. Granted this growth will not continue for Q3 and Q4 of 2018, however the company is most likely to finish the year with 25% revenue growth Y/Y.
And while one can make a point that much of the good news already is baked in the stock, one cannot disregard the fact that AMD's growth momentum will not end anytime soon, because starting from 2019 the main investment idea every analyst will be talking about is AMD's server chip market share.
Please note that 172M shares is about 20% of the float. Granted AMD's average volume is about 60M shares over the past three months, however this is
