It is definitely a good time for investors to buy Advanced Micro Devices, Inc. AMD shares.

Over the last one year, the stock has surged 295.12% and crushed the Zacks Electronics - Semiconductors industry, which increased 49.8%. Following the release of its quarterly numbers on Oct 20, Advanced Micro shares have gained over 62% so far.

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What’s Driving its Growth?

Advanced Micro reported encouraging third-quarter 2016 results wherein the top and bottom lines surpassed the Zacks Consensus Estimate.

Also, both revenues and earnings increased on a year-over-year basis, primarily driven by higher sales of semi-custom System on Chips (SoC) and better-than-expected seasonal graphics sales. For full-year 2016, Advanced Micro expects revenues to be up almost 6% from 2015.

ADV MICRO DEV EPS Diluted (TTM)

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ADV MICRO DEV EPS Diluted (TTM) | ADV MICRO DEV Quote

Advanced Micro entered into a definitive agreement to form a joint venture (JV) with Tianjin Haiguang Advanced Technology Investment Co., Ltd. (THATIC) in Apr 2016. This agreement is part of the company’s efforts to gain share in the fastest growing regional data center server market.

As part of the JV, the company licensed its high-performance processor and SoC technology to THATIC for the Chinese market. In return, Advanced Micro will get $371 million cash and 15% stake in the new entity. The deal is of great importance to the company since it will accelerate its growth and better monetize its valuable assets

Despite its late entry, Advanced Micro has attained the position of a major player in the microprocessor and graphics processing markets. The company has had a very rough time because of the strength and market position of its two primary competitors Intel INTC and NVIDIA NVDA. Advanced Micro combined its own engineering talent with that of ATI Technologies to develop capabilities in both these areas. Considering the might of its competitors, the company has done well to hold its own in the face of significant changes in the markets it serves.

In Sep 2015, Advanced Micro formed Radeon Technologies Group to focus on its graphics business and strengthen its performance in traditional graphics markets. The new group will now be able to pursue its strategy for standalone graphics chips and strengthen its position as a graphics chip supplier and compete better with NVIDIA.

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