Advanced Micro Devices, Inc. (NASDAQ:AMD) had a much better day on Wednesday than it might at first appear. First off, the broad market got walloped, with the S&P 500 dropping 2.4% from morning highs to afternoon lows, while AMD shares rallied 6% during the same period of the day. It did not rally because of some headline hype input. It just rallied.

Second, we got a further update from ASUS on INTC, noting that: “We cannot answer on behalf of Intel,” said Jerry Shen, chief executive ASUS during the company’s earnings conference. “For example, data center will be the priority for Intel shipments, but priority is something we cannot answer on behalf of Intel. The shortage will affect component levels the most, such as the motherboard. Currently, we believe that this will not be resolved before the Q2 of next year. Perhaps, it will be resolved in Q3 of next year. So, from now to next year we face many uncertainties in terms of CPU shortages.”

Advanced Micro Devices, Inc. (NASDAQ:AMD) shareholders may want to ignore the part about whether or not the high-margin maximization is taking place in an advantageous way for INTC. That’s truly irrelevant here.

The important part is that the CPU shortage issue is starting to see further confirmation. And this has been a major bear item for AMD. So, to see the stock ramp higher against a tough tape on further confirmation of this issue (on a multi-quarter timeframe) is really a signal about one thing: seller exhaustion.

The best signals are often about omission. If something that should happen, doesn’t happen, then you have a clear statement about the vulnerability to that thing. In this case, AMD had every reason to get taken to the woodshed today, and we saw a 6% rally.

One additional theory is that the concept of INTC’s CPU shortage is becoming a bull item for AMD as a feature of a competitive vacuum dynamic. In any case, it’s an extraordinarily bullish signal at this stage of the pattern.

Surface

Advanced Micro Devices, Inc. (NASDAQ:AMD) bills itself as a semiconductor company worldwide. It operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom.

The company’s products include x86 microprocessors as an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), and professional GPUs; and server and embedded processors, and semi-custom System-on-Chip (SoC) products and technology for game consoles.

It provides x86 microprocessors for desktop PCs under the AMD Ryzen, AMD Ryzen Pro, Threadripper, AMD A-Series, AMD E-Series, AMD FX CPU, AMD Athlon CPU and APU, AMD Sempron APU and CPU, and AMD Pro A-Series APU brands; microprocessors for notebook and 2-in-1s under the AMD Ryzen processors with Radeon Vega GPUs, AMD A-Series, AMD E-Series, AMD C-Series, AMD Z-Series, AMD FX APU, AMD Phenom, AMD Athlon CPU and APU, AMD Turion, and AMD Sempron APU and CPU brands; and microprocessors for servers under the AMD EPYC and AMD Opteron brands. It also offers chipsets under the AMD brand; discrete GPUs for desktop and notebook PCs under the AMD Radeon and AMD Embedded Radeon brand; professional graphic products under the AMD Radeon Pro and AMD FirePro brands; and customer-specific solutions based on AMD’s CPU, GPU, and multi-media technologies.

In addition, it provides embedded processor solutions for interactive digital signage, casino gaming, and medical imaging under the AMD Opteron, AMD Athlon, AMD Sempron, AMD Geode, AMD R-Series, G-Series, and AMD Embedded Radeon brands; consumer graphics under the AMD Radeon brand; and semi-custom SoC products.

Advanced Micro Devices, Inc. (NASDAQ:AMD) generated sales of $1.7B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -5.9% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.1B against $1.9B, respectively).

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