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Wednesday, April 25, 2018

AMD: Shorts Are Trapped After Strong Quarter

We expected on Monday that AMD (NASDAQ:AMD) crypto bears would be "caught short." Earnings beat and the guide was strong. Add to that their crytpo story wasn't that weak after all especially given the crypto price drops.

One comment from Dr. Lisa Su that hinted they actually see more crypto opportunity than in the past was her saying crypto is "here to stay." That's a strong comment especially when compared to Dr. Su historically downplaying crytpo.

AMD said crytpo/blockchain related sales were about 10% which was actually higher than what they gave last quarter. No crypto weakness here yet. Sorry shorts. That's good for NVIDIA (NASDAQ:NVDA) too who's been beat up by crypto-bears.

As for revenues they jumped 40% from the previous quarter's growth of 22%. They guided for further acceleration to about 50% growth next quarter.

If there was a short story on crytpo or otherwise, those shorts need to cover. Sorry bears.

Ryzen drives the first half. EPYC drives the second half and crypto sounds much better than feared. They did say they expect crytpo to be down in Q2.  Did I mention this, shorts have all the news, they need to cover.

Shorts hit new highs recently so we're getting our popcorn to watch them all have to now cover.

We maintain a Buy rating and have big stock price upside based on 2018 earnings but soon we'll be using 2019 numbers which can give us even higher prices.

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