LONDON (MarketWatch) -- Citigroup upgraded Advanced Micro Devices Inc. (AMD 3.88, +0.18, +4.87%) to buy from hold, citing valuation. Citi said it recognizes that AMD's competitive position is poor, but added that it is trading at a 45% discount to its peer group, making the risk/reward balance favorable. The broker also said that AMD's competitive position is likely bottoming out, its gross margin is expected to rise from second-quarter levels and that 2010 consensus earnings estimates are likely conservative.
