Shares in microprocessor manufacturer Advanced Micro Devices Inc. (NYSE:AMD) are being driven upward in trading on Monday in response to the company’s release of its earnings report for the first quarter of 2014 on Friday April 17. Shares opened at $4.01 on Monday morning after closing at $3.69 on Friday afternoon. At time of writing shares in the company were trading at $4.16, close to 13% higher than Friday’s close.

Advanced Micro Devices AMD

AMD earnings wow Wall Street

Friday’s earnings report showed an Advanced Micro Devices Inc. (NYSE:AMD) that most shareholders were not expecting. The company showed earnings per share of 2 cents on revenue of $1.4 billion. 25 analysts surveyed by Businessweek said they expected the company to break even in the first quarter of the year and bring in revenue of $1.3 billion.

Much of the impetus for the inflation in Advanced Micro Devices In. (NYSE:AMD) was provided by the reactions of analysts rather than the numbers themselves. Bernstein Research said that it was “wrong on the trajectory of AMD’s revenue” and that there was “near-term upside.” The outlook for the company in the longer term is still quite poor, however, and the company may never manage to replace lost PC revenue.

The reaction to the relatively medium beat shows that little was expected from Advanced Micro Devices Inc. (NYSE:AMD) in this morning’s earnings report. Analysts have been expecting the company’s turnaround to be sluggish, and their diagnosis has been right for some years. This morning’s better than expected return may or may not turn that particular trend around.

AMD turnaround remains difficult

Advanced Micro Devices Inc. (NYSE:AMD) used to rely on the PC market for its income. The company was, once upon a time, neck-and-neck with Intel Corporation (NASDAQ:INTC) in that market. History does as it will, however, and the company fell from the top of that market. It still made a tidy profit, and investors were reasonably happy. That was until the bottom began to fall out of the PC market as a whole.

The better than expected results that Advanced Micro Devices Inc. (NYSE:AMD) managed in this morning’s report were as a result of a stronger than expected PC market. The company is doing its best to attempt a near complete exit from reliance on laptop sales, but that’s going to take time.

Investors in Advanced Micro Devices Inc. (NYSE:AMD) are betting on a change in the business. The company is trading at a high multiple for a turnaround story, but it remains one of the leaders in the semiconductor business. A bet on the firm’s long term is certainly one that carries too much risk for most investors.