Why Advanced Micro Devices Inc. Stock Rose 34% in January

MarketsMotley Fool

What happened

Shares of Advanced Micro Devices (NASDAQ: AMD) gained 33.7% in January, according to data from S&P Global Market Intelligence. The chip designer's surge started with a rival's security scandal and ended with an earnings bang.

Continue Reading Below

So what

In the first few days of the month, AMD shares rose while archrival Intel (NASDAQ: INTC) was falling on news of security-blasting chip flaws dating back to 1995. It was later revealed that AMD's chips are vulnerable to the same exploits, but investors largely shrugged off that detail.

AMD finished off the month in style, reporting strong fourth-quarter results. Revenues rose 35% year over year to $1.48 billion while the bottom line swung to adjusted earnings of $0.08 per share. Analysts would have settled for earnings of $0.05 per share on sales near $1.41 billion.

Now what

The latest iterations of AMD's Radeon graphics chips and Ryzen central processors drove the company's muscular revenue gains in Q4, and CEO Lisa Su is looking forward to another bunch of new product announcements in 2018. "We are even more excited about 2018 as we launch our next wave of high-performance products and continue to position AMD as one of the premier long-term growth companies in the technology industry," Su said in a prepared statement.

I keep waiting for AMD to trip itself up, as it has done so many times in the past. But the company keeps disappointing me in that regard, and there is much rejoicing among its shareholders. One of these days, I might even have to admit that AMD is on a solid, sustainable path toward healthy long-term results.

10 stocks we like better than Advanced Micro DevicesWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Advanced Micro Devices wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of February 5, 2018

Anders Bylund owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.