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Why Merrill Lynch Now Has the Highest AMD Target of All Over Intel and NVIDIA

Sometimes you see analyst calls that stay negative for too long, and sometimes those same analysts decide to get bullish after a massive run. It happens. After all, analysts often have years and years of evaluating a company, and sometimes it is just too hard to see that good news can last after years of disappointment. So what should investors take from a major upgrade of Advanced Micro Devices Inc. (NASDAQ: AMD) when the analyst report admits that it is very late to the party?

AMD was raised to Buy from Underperform at Merrill Lynch. That is a rare two-notch upgrade, and it comes after AMD shares have risen exponentially off of their lows. Merrill Lynch’s team covering AMD is led by Vivek Arya and Adam Gonzalez, and their price objective was raised to $12 from $5 in this call.

This call also has a lot of overlap with Intel Corp. (NASDAQ: INTC) and NVIDIA Corp. (NASDAQ: NVDA) due to processors, graphics processing units, deep learning, artificial intelligence and even personal computers (PCs). Merrill Lynch’s team is the same for Intel, which they rate as Buy with a $42 price objective. They also rate NVIDIA with a Buy rating and just raised their price objective to $112 from $95 on this same day.

What investors need to consider here is that AMD was at $9.56 prior to the call, and its prior 52-week range was $1.75 to $9.79. After about an hour of trading on Thursday, AMD shares were up 7.7% at $10.30 and more than 33 million shares had already traded hands. The average daily volume is close to 47 million shares.

So, the first thing is Merrill Lynch’s admission that it is late to the party. The team said that it is “better late than sidelined” and that its “growth options too large to ignore.” They even said that AMD is uniquely...