Advanced Micro Devices closed at $3.99 earlier today, up 52%. The highest it has gained on a given day since the stock's original listing in 1979. This is on the tail of the company's Q1 2016 quarterly report which beat expectations both in terms of results and Q2 outlook. AMD was the biggest gainer and most active stock on the NASDAQ exchange. Volume of stocks traded topped 140 million, more than ten times the 50 day average of 12 million.

The company announced a joint venture to develop and sell high performance enterprise x86 chips for the Chinese market. A deal that's been described as the best server challenge to Intel, AMD's much larger rival. The agreement involves AMD providing the engineering technical know-how while THATIC provides the resources and financial backing. The licensing deal is expected to net AMD $293 million plus royalties.

The company also announced that it will be ramping three new semicustom wins with an estimated life-time revenue of over 1.5 billion. One design is expected to start contributing to the company's earnings in the second half of 2016, while the other two are expected to begin generating revenue in 2017. These designs are believed to be for new game consoles for Microsoft, Sony and Nintendo.

A Good Day For AMD But The Best Is Yet To Come

Today's gains represent the highest ever since the company's original listing in a public stock exchange in 1979. And while this may be cause for celebration, the company's best products have actually yet to come. What AMD's CEO, Lisa Su, described as the company's most competitive roadmap in more than a decade is set to bear fruit this year. With the first next generation GPU and CPU product launches based on that roadmap to take place in the second half of the year.

AMD President & CEO Lisa Su – Q4 2015 Earnings Call

We remain focused on completing our strategic work around three key growth pillars. First, in PCs, even in a declining overall market, we believe we can regain client compute and discrete graphics share for the year, driven by gaming, VR, commercial, and our most competitive product roadmap in more than a decade.

We have clear opportunities to regain GPU share in 2016 based on the performance per watt of our new GPUs and software leadership. Earlier this quarter at CES, we announced our new Polaris GPU architecture, which we expect to begin shipping in the middle of 2016.

AMD's New Products Are Of Paramount Importance To Its Success - Zen & Polaris

This year will be the very first time that the market is going to see the launch of truly next generation graphics chips since the introduction of AMD's GCN and Nvidia's Kepler GPUs back in 2012. This has been by far the longest period of time spent at the same process node that we've witnessed in the GPU space. Process nodes dictate the progression of what has become known as Moore's law, which states that integrated circuits of the same size should double in complexity - number of transistors - every couple of years. Sadly, we haven't seen that take place for four years now, however that's finally changing this year.



In 2016 AMD introduced its next generation family of graphics chips code named Polaris. These upcoming GPUs will leverage Globalfoundries' 14nm FinFET process, 14LPP. A significant step-up from the aging 28nm planar technology of current products. In addition to a smaller feature size, the new process features 3D "FinFET" transitors. A groundbreaking innovation in manufacturing, first introduced by Intel in 2012, that serves to boost the speeds of chips while reducing their power consumption.

Advances in graphics architecture aside, the jump from 28nm to 14 alone gives engineers double the number of transistors to design with at any given chip size. Which means a de facto doubling of horsepower, although the company is promising a 2.5X gain with Polaris thanks to additional architectural improvements. The Polaris graphics architecture will power everything from gaming desktops, laptops and professional workstations.

































