Shares of Advanced Micro Devices Inc. (NYSE: AMD) were moving higher Tuesday after Ascendiant Capital started coverage of the stock with a Buy rating. The shares got an extra boost after the company said in a regulatory filing that the sovereign wealth fund of Abu Dhabi had exercised warrants to buy 34.9 million shares on Friday and now owns 18.6% of the company’s stock.
AMD was one of 24/7 Wall St.’s nine stocks that could double in 2014, and the developments seem to keep pointing in that direction.
Ascendiant analyst Cody Acree assigned the Buy rating, with a $5 target, because the firm sees the chip maker “working through a methodic restructuring and repositioning that has already reduced spending and earned significant wins that are driving growth at Sony, Microsoft, Verizon, Apple and others.”
He warned, however, not to expect “any singular dramatic near-term catalyst.”
AMD has finished one round of restructuring that saw the company cut 15% of its staff, reduce operating expenses by 26% and return to generating positive cash flow. AMD has also reduced its dependence of chip sales to makers of personal computers. Non-PC revenue has risen from 9% of revenue in the first quarter of 2013 to a third of revenue.
In a contrasting call on Tuesday, AMD was also maintained as Neutral with a $4 price target at Sterne Agee.
AMD shares were trading at $3.96 in early Tuesday trading, up 3.94%. They briefly touched $3.97. The shares have not held above $4 since Jan. 21. The 52-week range is $2.26 to $4.65. The consensus target on the shares before the Ascendiant rating was $3.97.
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