Cryptocurrency mining demand for AMD's graphics cards may be all the rage, but a top Wall Street firm says investors shouldn't overlook its improving processor chip business.

Bank of America Merrill Lynch reiterated its buy rating for the chipmaker's shares, saying the company's recently launched Ryzen processors are selling well against Intel.



"Our industry checks show improving mindshare/shelf-space for AMD's new Ryzen desktop-PC processors, incl. 30-50% share at prominent e-tailors, well ahead of AMD's 11% current desktop unit share," analyst Vivek Arya wrote in a note to clients Monday. "The key conclusion is that AMD has momentum which should gradually translate to share gains."



AMD launched its Ryzen line of processors on March 2.



Arya reaffirmed his $18 price target for the company, representing 41 percent upside from Monday's close.



The analyst cited how AMD's Ryzen chips typically have twice the number of processor cores in similar price ranges compared to Intel's products, which "translates to better multi-tasking/productivity" performance.



"AMD is getting broader OEM [PC original equipment manufacturer] placement which should help accelerate sales in the second half," he wrote.



Arya is also optimistic over AMD's newly launched Vega gaming graphics cards.



Early reviews on the Vega cards "are mostly positive and demand appears to be strong as popular online retail site NewEgg sold out of its initial allotment within 15 minutes," the analyst wrote.



AMD shares rose 1 percent on midday Tuesday after the report.



The company's shares are one of the market's best-performing equities in the past year with the stock up nearly 85 percent in the past 12 months through midday Tuesday compared with the S&P 500's 12.5 percent return. That performance ranks No. 4 in the entire S&P 500, according to FactSet.