Advanced Micro Devices Inc. (AMD) surprised the Street on Tuesday as it narrowed its loss in the most recent quarter and received a revenue boost from demand for its graphic processor units (GPUs), driven largely by the cryptocurrency​ mining craze. Shares of the Intel Corp. (INTC) competitor spiked over 10% afterhours, hitting a 10-year high following its better-than-expected Q2 results and Q3 outlook.

Cryptocurrency miners use graphic cards from AMD and its rival NVIDIA Corp. (NVDA) to “mine” new coins through intensive computation, which are then sold or held for future appreciation. According to data from CoinDesk, the cryptocurrency Ethereum​ is up 2,400% year-to-date (YTD), while Bitcoin has gained 160% over the same period. AMD stock spiked last month after news that a jump in digital currency prices had driven demand for the tech firm’s graphic cards to a point where major computer hardware vendors had sold out of its recently introduced RX 570 and RX 580 models.

Sustainable Mining?

Digital currency mining was a key topic among analysts during AMD’s earnings conference call as they asked for clarification on the magnitude and sustainability of the demand. While management noted that GPU revenue upside was driven by cryptocurrency applications, they weren’t specific on how much. Analysts at Jefferies highlight the fact that AMD is mitigating future downside risk and choosing not to incorporate continued digital currency mining outperformance in its guidance.  

Of further upside to AMD, Chief Executive Officer (CEO) Lisa Su told Barron’s there will be another semi-custom chip win that will ramp in 2018, though she can not yet tell who it is for.

Trading up 7.6% on Wednesday afternoon at $15.18 per share, AMD reflects a whopping 118% gain over the most recent 12-month-period and a 34% return YTD. (See also: AMD and Nvidia Could Fall On Cryptocurrency Trend.)

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