Just two months after downgrading shares of Advanced Micro Devices Inc. (AMD) to negative, one team of analysts on the Street has become more bullish on the chipmaker and less concerned about its reliance on demand from cryptocurrency miners. As industry giant Intel Corp. (INTC) faces setbacks moving into its next generation chip manufacturing technology, AMD may be positioned to gain on the weakness, according to one Wall Street bank. (See also: Intel’s Chip Lead Is ‘Disappearing.’)

AMD Improving Server Chip Sales Outweigh Crypto Risk

On Wednesday, Susquehanna lifted its rating on the Santa Clara, California-based semiconductor manufacturer from negative to neutral, highlighting AMD's improving server chip sales. Last month, shares of AMD spiked on earnings results which surpassed consensus estimates across the board and were driven by non-cryptocurrency-mining products. On the Q1 earnings call, the firm announced plans to roll out its next-gen 7-nanometer chip production by the end of 2018. Meanwhile, Intel's analyst call in late April shed light on delayed volume production under its 10-nanometer chip manufacturing process, pushed back to 2019.

"We believe Intel's [10-nanometer process] delay will help to maintain/improve AMD's competitiveness for their next generation of Epyc and Ryzen products," said Susquehanna analyst Christopher Rolland in a note to clients Wednesday. "A more competitive process technology may increase the likelihood of share gains versus Intel over the next few years, a potential game changer … We also expect additional share gains to come from the ramp of Ryzen Mobile, and AMD's server product Epyc."

In March, Rolland had downgraded AMD on concerns that Bitmain's application-specific integrated circuit (ASIC) for mining ethereum would steal market share away from the chipmaker. Yet a recent price hike by the Chinese rival has "destroyed its value proposition," said Rolland.

Rolland hiked his 12-month price target on AMD from $8 to $11, still reflecting an approximate 14% downside from Thursday morning as shares trade down about 0.5% at $12.78. AMD has gained 23.7% year-to-date (YTD) and has returned 13.9% over 12 months, compared to the the broader S&P 500's 1.7% increase and 15.4% growth over the same respective periods. (See also: AMD, NVIDIA at Risk on New Cryptocurrency Chip.)