Shares of Advanced Micro Devices will rally 36 percent in the next year due to better chips and new virtual reality gaming upgrades, according to Canaccord Genuity.

"We remain impressed with the new management team and our estimates that assume only modest market share recovery in core markets should yield material upside to consensus," Canaccord Genuity's Matthew Ramsay wrote in a note to clients Thursday.

"AMD is set up ... to benefit for upcoming 4K/VR-related gaming console refreshes at an increasing pace."