By CCN: While other semiconductor companies were struggling, AMD stocks continued to surge in May; a price movement likely fueled by the bitcoin bull market.
Advanced Micro’s stocks are booming, gaining as much as 99 percent in the last 12 months. AMD continued its surge even in May when other semi stocks had crashed.
“AMD is definitely the star that shines within the SMH group. Analysts are saying they have a better product for the first time in 50 years than Intel does, and they’re getting a tremendous amount of love as a result,” BK Asset Management Managing Director of FX Strategy Boris Schlossberg told CNBC.
According to Schlossberg, AMD having better products than Intel isn’t the only reason behind the surge of the company’s stocks as bitcoin also had its share in the Advanced Micro price rally.
“We’ve had a very strong rally in bitcoin. Bitcoin was a big driver of the semi rally when it rallied the first time, so if we get bitcoin over $10,000, we can get it back to that mania of mining again, and that should be an additional tailwind for AMD. So I think AMD is very well positioned,” the analyst said.
Bitcoin started its uptrend in April, skyrocketing from $4,100 to $8,700 and gaining 112 percent in two months. With bitcoin, the prices of other digital assets have increased, including ether that nearly doubled its price from $141 to $270 in the same period.
Before the current bull market, miners had struggled to gain profits from bitcoin mining. According to economist and global market analyst Alex Krüger, miners need bitcoin’s price to be around $3,550 for breakeven costs.
Considering the breakeven price of $3,550, bitcoin miners can make substantial profits at the current level of $8,700. If bitcoin continues its uptrend, the cryptocurrency will soon reach $10,000, marking the start of the mining mania Schlossberg had described.
Despite the firm’s pessimistic forecast for Q2 and Q3 2019, AMD will likely experience a massive increase in crypto mining hardware sales as soon as the mining mania commences, shooting up the demand for mining equipment.