Good News Powers Advanced Micro Devices (AMD) Ahead of Earnings

Advanced Micro Devices, Inc (NYSE: AMD) is scheduled to report earnings late next week and over the past week or so, there has been a steady stream of good news about the stock. I should mention that we have Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio and its been an up and down ride for us as the last earnings report, which actually wasn't all that bad, erased our gains but shares have largely recovered since then. With that in mind, here's the latest good news from the past week or so:

Verizon Picks AMD's SeaMicro Servers to Create New Cloud. On Monday, Advanced Micro Devices announced that Verizon Communications Inc (NYSE: VZ) is deploying SeaMicro SM15000™ servers for its new global cloud platform and cloud-based object storage service. According to the press release, Verizon and AMD co-developed additional hardware and software technology on the SM15000 server to provide unprecedented performance and reliability that is backed by enterprise-level service level agreements (SLAs). The Wall Street Journal's Digits blog has noted that Advanced Micro Devices had puzzled some people when it bought the startup SeaMicro as no-one knew at the time that Verizon is exclusively using SeaMicro server and storage hardware for its cloud computing service. However, AMD isn't disclosing just how many pieces of hardware are involved, nor how much it will be paid but this is the biggest deal ever for SeaMicro. FBR Capital Markets Raises Its Price Target. On Monday, FBR Capital Markets upped their price target on Advanced Micro Devices from $5.50 to $6.00. In light of Verizon announcing two enterprise infrastructure-as-a-service offerings, FBR Capital Markets' analysts wrote:  

"Details surrounding the announcement lead us to believe that Verizon has chosen SeaMicro microservers to power these platforms and may provide AMD as much as ~$50M in incremental annual revenues. While we reported after our BIG 'switches': little SERVERS conference that Verizon had deployed SeaMicro in 12 global datacenters, this announcement signifies a more meaningful commitment, well beyond a trial deployment."

They also added:

"In addition to SeaMicro, AMD's results should be buoyed by the better-than-expected PC market exhibiting resiliency, as our ODM notebook tracker indicates units up 7% sequentially. Furthermore, China has relaxed its national gaming console ban, causing us to increase our 2015 Xbox One and PS4 estimates. Additionally, AMD may have a chance at providing parts for both the MS 'Bestpad' and Sony 'Vita TV.'"

AMD's Mantle Matters. Advanced Micro Devices recently launched Mantle as a brand new API (Application Programming Interface) designed to significantly aid game developers in crafting games targeted for release on multiple platforms and Jason Evangelho has written a piece for the Forbes Contributor Network about its importance. He noted:

"AMD's Mantle is a While its prevalence is yet to be determined, its importance is clear. Mantle is a rally cry from AMD to developers, and a crucial consideration for PC gamers choosing their next graphics card."

Origin PC Publicly Dumps the AMD Graphics Options. In what might be considered not so good news, the CEO of the boutique PC builder Origin PC has informed some in the media that his company will no longer sell machines with AMD graphics cards inside based on "a combination of many factors including customer experiences, GPU performance/drivers/stability, and requests from our support staff." However,  Brad Chacos has written a blog post (since updated with further updates) to question PCWorld's motives and to ask whether Nvidia has "purchased" Origin's fealty with marketing dollars. Both Nvidia and Origin have issued denials. Upcoming Earnings Report. Advanced Micro Devices is scheduled to report third quarter earnings on Thursday, October 17, after the market closes with the conference call scheduled for 5:30 p.m. EDT / 2:30 p.m. PDT – meaning big investors and traders alike will be jockeying their positions from now until late next week. Moreover, it should be remembered that the stock dropped after the last earnings report which coincided with some other tech earnings reports that were disappointing. Share Performance. On Tuesday, Advanced Micro Devices fell 3.63% to $3.72 (AMD has a 52 week trading range of $1.81 to $4.65 a share) for a market cap of $2.68 billion plus the stock is up 63.2% since the start of the year, up 15.5% over the past year and down 17.9% over the past five years:

Finally, here is the latest technical chart for Advanced Micro Devices:

In other words, there is plenty of good news for investors and traders alike in Advanced Micro Devices as the company heads into earnings next week.  

SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.