Advanced Micro Devices (AMD) is set to launch its Llano APU in Q3 of 2011 to compete with Intel's (INTC) Sandy Bridge. Here we take a look at how these two processors stack up against each other. AMD also competes with Nvidia (NVDA) in the PC microprocessor and graphics businesses.

Our price estimate for AMD stands at $8.85, which is roughly in line with market price.

Advanced Micro Devices (AMD) mainly competes with Intel Corporation (INTC) in the server processor market. By our estimates, server processors constitute around 20% of AMD's stock price.

AMD's market share in server processors was at its peak in 2006, at around 25%, driven by the success of its Opteron series of processors. But very soon Intel regained its lost share by introducing the Xeon processor and releasing upgrades and newer products in the following years. AMD's loss was compounded when it was late in its launch of the Barcelona chip in 2008.

Advanced Micro Devices (AMD) competes with Intel (INTC) and Nvidia (NVDA) in the PC microprocessor and graphics businesses. Our price estimate for AMD stands at $9.30, which is roughly in line with market price. We estimate that although most of the company's value comes from microprocessor business, about 14% can be attributed to graphics.

One of the recent wins in this regard was Apple's (AAPL) plan to use AMD's graphics cards in its Macbook Pro notebooks. What does this tell us about AMD?

Advanced Micro Devices (AMD) competes with Intel (INTC)and Nvidia (NVDA) in the PC microprocessor and graphics businesses. Our price estimate for AMD stands at $9.30, which is roughly in line with market price. The company recently launched a marketing campaign to better promote its products against competitors. Intel, for one, has continuously overshadowed AMD. Does AMD's stock value stand to gain from these initiatives? Here we assess the outlook for a few key metrics.

Advanced Micro Devices (AMD - option chain) stock is trading lower today after the company announced the resignation of CEO Dirk Meyer, naming Thomas Seifert interim CEO. Investors are surprised by this announcement, since Meyer took over AMD when the company was floundering and has since stabilized AMD. If you think this stock won't be rising too far in the coming months, then it could be a good time to look at a bearish hedged play on AMD.

This morning, AMD opened at $8.77. So far today the stock has hit a high of $8.80 and a low of $8.35. As of 12:25, AMD is trading at $8.49, down $0.70 (-7.6%). The chart for AMD looks neutral and S&P gives AMD a neutral 3 STARS (out of 5) hold ranking.

Analyst Upgrades

• Hewlett-Packard (HPQ) to buy from neutral at UBS.
• Fluor (FLR) to overweight from neutral at JPMorgan.
• Macy's (M) to outperform from neutral at Credit Suisse.
• Canadian Solar (CSIQ), JA Solar (JASO) and HeartWare (HTWR) to buy from hold at Auriga.
• Ashford Hospitality (AHT) to outperform from market perform at FBR Capital.
• RenaissanceRe (RNR) to buy from neutral at Janney Capital.
• DCT Industrial (DCT) to market perform from underperform at Wells Fargo.
• Coeur d'Alene Mines (CDE) and Silver Standard (SSRI) to buy from hold at Deutsche Bank.
• Weatherford (WFT), Hercules (HERO), GulfMark Offshore (GLF), Tidewater (TDW) and GlaxoSmithKline (GSK) to buy from hold, and Diamond Offshore (DO) to hold from underperform, at Jefferies.
• Ritchie Bros. (RBA) to buy from neutral at BofA/Merrill.
• AstraZeneca (AZN) to buy from hold at Citigroup.

Analyst Upgrades

• General Electric (GE) and Barclays (BCS) to buy from neutral at UBS.
• Warnaco (WRC) to outperform from market perform and Melco Crown (MPEL) to market perform from underperform at Wells Fargo.
• Parker-Hannifin (PH) and Emerson Electric (EMR) to buy from neutral at Goldman.
• AMD (AMD) to buy from neutral at Nomura.
• Novellus (NVLS) and Sherwin-Williams (SHW) to equal weight from underweight at Morgan Stanley.
• OpenTable (OPEN) to outperform from market perform at Morgan Keegan.
• Skilled Healthcare (SKH) to buy from hold at Jefferies.
• Lear (LEA) to overweight from equal weight at Barclays.
• Adobe (ADBE) to buy from neutral at BofA/Merrill.

For years Microsoft (MSFT) was the tech leader. Then, Google (GOOG) came along and Microsoft missed the entire search engine revolution. But Microsoft still dominated in software. Then came Apple (AAPL) with its iPod, iPhone, and iPad. Again, Microsoft missed the small device revolution.

The Wall Street Journal reports that now Microsoft is playing catch-up again. With its next operating system it will use low-powered chips similar to those Apple uses.

Call volume is unusually heavy on Advanced Micro Devices (AMD) today, with nearly 8,300 contracts changing hands during the first hour of the session -- easily outpacing the stock's average daily call activity of 6,774 contracts. However, the day's option volume isn't necessarily bullish in nature.

Nearly all of today's volume has taken place at AMD's January 2012 7.50 call, where a block of 8,000 contracts traded at the bid price -- suggesting they were most likely sold. This block appears to have been tied to a corresponding stock trade, which means we're likely seeing the initiation of a buy-write position.

We may soon see "one of the biggest advances in years in the technology that powers laptop and desktop computers," according to the Wall Street Journal, as chipmakers begin to merge microprocessors and graphics-processing units.

Microprocessors are described as "the calculating engines that run most PC software," while graphics-processing units "render images in video games and other programs." According to the report, Intel (INTC) and Advanced Micro Devices (AMD) are expected to make announcements about this move at the upcoming Consumer Electronics Show.

Analyst Upgrades

• Goldman upgraded CSX (CSX) to neutral from sell.
• General Cable (BGC) was upgraded to buy from hold at KeyBanc.
• Morgan Stanley upgraded Chart Industries (GTLS) and Dresser Rand (DRC) to overweight from equal weight.
• Blackrock (BLK) was upgraded to outperform from neutral at Macquarie.
• Credit Suisse upgraded Zions Bancorp (ZION) to neutral from underperform and GameStop (GME) to outperform from neutral.
• Honeywell (HON) was upgraded to outperform from sector perform at RBC Capital.
• Panera Bread (PNRA) was upgraded to buy from neutral at SunTrust.

Analyst Upgrades

• Macquarie upgraded Intel (INTC) to outperform from neutral and Advanced Micro (AMD) to neutral from underperform.
• Pfizer (PFE) was upgraded to outperform from market perform at Bernstein.
• Capstead Mortgage (CMO) was upgraded to outperform from market perform at FBR Capital.
• Oppenheimer upgraded Halliburton (HAL) to outperform from perform.
• Gilead (GILD) was upgraded to outperform from sector perform at RBC Capital.
• Skilled Healthcare (SKH) was upgraded to outperform from market perform at JMP Securities.
• Citigroup upgraded CapitalSource (CSE) to buy from hold.

Advanced Micro Devices (AMD) is scheduled to take its turn in the earnings confessional after Thursday's close, with analysts looking for a third-quarter profit of 6 cents per share on $1.67 billion in sales. AMD swallowed a loss of 18 cents per share in the year-ago quarter, leaving plenty of room for improvement.

The semiconductor company has a solid history on the earnings front, having surpassed analysts' per-share profit expectations in each of the past four quarters. However, traders don't seem convinced that AMD can manage another upside surprise.