Advanced Micro Devices (AMD) Gains 6% as Cryptocurrency Demand Grows

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Shares of Advanced Micro Devices AMD gained nearly 6% on Tuesday, basically erasing the stock's losses during the recent tech sell-off and proving that investors are paying attention to the new sources of demand for the company's products.

For one, investors are reacting to a wave of positive reviews related to AMD's latest data center chip, Epyc. For example, Pacific Crest analyst Michael McConnell said that the chip offers an alternative to similar products from one of AMD's key rivals, Intel INTC .

"Feedback from data center partners regarding AMD's latest data center Zen-based chip, Epyc, has been positive," the analyst said in a note published Tuesday.

Furthermore, investors and analysts are starting to realize that the recent surge in the popularity of cryptocurrencies could be a benefit for AMD as "miners" of these currencies rely on the high-performance of its graphics chips.

The infamous bitcoin has skyrocketed in value over the past year, and up-and-coming cryptocurrencies like ethereum are also soaring. Just today, analysts from KeyBanc Capital Markets raised their second-quarter EPS estimates for AMD, citing "strong GPU demand from the cryptocurrency mining market."

Shares of AMD gained 71 cents, closing at $12.64. The stock has nearly returned to the $12.90 per share level it was at before the recent tech volatility, which really started on June 9.

As for now, AMD remains a Zacks Rank #3 (Hold).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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