Rating Boost Pushes AMD Shares Higher

Advanced Micro Devices Inc. shares rose 14% after Merrill Lynch & Co. analyst Tom Kurlak, a noted skeptic on many semiconductor stocks, boosted his rating on the microprocessor maker. AMD, the biggest rival to industry leader Intel Corp., rose $3.50 to close at $29.13 on the New York Stock Exchange. Earlier, the stock touched a seven-month high of $29.38. Kurlak has been one of the few naysayers about Intel, saying that the trend toward less-expensive personal computers will hurt its profits. AMD, meantime, has embraced the market for cheaper PCs, and that’s helped it increase sales and earnings. “AMD has the largest share of the sub-$1,000 PC market, the fastest-growing of all the PC sectors,” said Kurlak, who raised his rating on AMD to “accumulate” from “neutral.” He rates Intel, the world’s largest chip-maker, “neutral.” Once dogged by production problems and weak product offerings, AMD has rebounded this year with strong sales of its K6 microprocessors, designed for low-priced PCs. AMD earlier this month said it expects to ship at least 4.7 million K6s in the fourth quarter, up from 3.8 million in the third quarter. Last month, the company reported a surprising third-quarter profit after four straight quarters of losses. Sales in the quarter rose 15%.