Advanced Micro Devices, Inc. (NASDAQ:AMD) continues to edge higher on the market one week after posting its first revenue increase in two years. Given that the stock has registered two straight days of gains, investors are starting to question the actual catalysts behind the impressive run.
The chipmakers surprise quarterly profit came earlier than the company had projected further helping bolster its sentiments on the street. The surprise quarterly profit was mostly aided by one-time gains in the quarter, which some investors believe could not have pushed the stock to the current highs.
Acquisition Talk
There is already talk that Advanced Micro Devices is attracting interest among Chinese technology companies that are considering tabling a takeover bid. Acquisition talk is most of the time known to fuel interest on a stock, seen by the 30% rise in the past two trading sessions.
Fueling the acquisition talk is the fact that AMD sold a majority stake in two Asian operations in April in a deal believed to be more than $371 million. Forward Concepts Co analyst, Will Strauss, believes ‘someone’ is closely looking at the chipmaker with a view of tabling a bid.
14nm Manufacturing
Away from the acquisition talk, it has also emerged that the company is gaining favor among investors after the company allegedly made known its plans with the upcoming 14nm chips. Question over where the company will produce its next 14nm products has gone answered for long, a move that has continued to scare investors from the stock in the recent past.
The company has however settled the matter according to Forbes contributor, Patrick Moorhead, who believes the same will help address the company’s risk profile over the next three years. According to the contributor, Advanced Micro has decided to diversify the manufacturing of the 14nm chips having contracted the services of Samsung.
For years, the chipmaker has played catch up to Intel Corporation (NASDAQ:INTC) when it comes to graphics on its chips. That is however set to change as the company moves to fabricate its products at Samsung, using its FinFet Technology. The company says it has already run some products at the Korean company and could enable full production given the agreement it has with GlobalFoundries.
The fact that Advanced Micro is already considering fabricating its products at Samsung means it is ready to battle the big boys in the industry. The process that will be used to fabricate Advanced Micro Devices, Inc. (NASDAQ:AMD)’s product at Samsung is not the same as the one that is used on Apple Inc. (NASDAQ:AAPL) products. However, it should go a long way in making Advanced Micro Devices’ CPUs, APUs and SoCs of a better quality to what people are used to.
