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Advanced Micro Devices closed at $3.99 earlier today, up 52%. The highest it has gainedon a givenday since the stock's original listing in 1979. This is on the tail of the company's Q1 2016 quarterly report which beat expectations both in terms of results and Q2 outlook. AMD was the biggest gainer and most active stock on the NASDAQ exchange. Volume of stocks traded topped 140 million, more than ten times the 50 day average of 12 million.

The company announced a joint ventureto develop and sell high performance enterprise x86 chips for the Chinese market. A deal that's been described as the best server challenge to Intel,AMD's much larger rival. The agreementinvolvesAMD providingthe engineering technical know-how while THATIC provides theresources andfinancial backing. The licensing deal is expected to netAMD $293 million plusroyalties.

The company also announced that it will be ramping three new semicustom winswith an estimated life-time revenue of over 1.5 billion. One design is expected to start contributing to the company's earningsin the second half of 2016, while the other two are expected to begin generating revenue in 2017. These designs are believed to be for new game consoles for Microsoft, Sony and Nintendo.

A Good Day For AMD But The Best Is Yet To Come

Today's gains represent the highest ever since the company's original listing in a public stock exchange in 1979.And while thismay be cause for celebration, the company's best products have actually yet to come. What AMD's CEO, Lisa Su, described as the company's most competitive roadmap in more than a decade is set to bear fruit this year. With the first next generation GPU and CPU product launches based on that roadmap to take place in the second half of the year.

AMD President & CEO Lisa Su – Q4 2015 Earnings Call

We remain focused on completing our strategic work around three key growth pillars. First, in PCs, even in a declining overall market, we believe we can regain client compute and discrete graphics share for the year, driven by gaming, VR, commercial, and our most competitive product roadmap in more than a decade.

We have clear opportunities to regain GPU share in 2016 based on the performance per watt of our new GPUs and software leadership. Earlier this quarter at CES, we announced our new Polaris GPU architecture, which we expect to begin shipping in the middle of 2016.

AMD's New Products Are Of Paramount Importance To Its Success- Zen & Polaris

This yearwill be the very first time that the market is going to see the launchoftruly next generation graphics chips since the introduction of AMD's GCN and Nvidia's Kepler GPUs back in 2012. This has been by far the longest period of time spent at the same process node that we've witnessed in the GPU space. Process nodes dictate the progression of what has become known as Moore's law, which states that integrated circuits of the same size should double in complexity - number of transistors - every couple of years. Sadly, we haven't seen that take place for four years now, however that's finally changing this year.

In 2016 AMD introduced its next generation family of graphics chips code named Polaris.These upcoming GPUs will leverage Globalfoundries'14nm FinFET process, 14LPP. A significant step-up from the aging 28nm planar technology of current products.In addition to asmaller feature size, the new process features 3D "FinFET" transitors. Agroundbreakinginnovation inmanufacturing, first introduced by Intel in 2012, that serves to boost the speeds of chips while reducing their power consumption.

Advances in graphics architecture aside, the jump from 28nm to 14 alone gives engineers double the number of transistors to designwith at any given chip size. Which means a de facto doubling of horsepower, although the company is promising a 2.5X gain with Polaris thanks to additional architectural improvements. The Polarisgraphics architecture will power everything from gaming desktops, laptops and professional workstations.

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AMD's Zen Is Arriving Just At The Right Time -DirectX 12 & Low Level APIs To Boost CPU Momentum

We witnessed Microsoft's DirectX 12 low level graphics programming interface in action this year leveraged in severalgame titlesso far. Including Ashes of The Singularity, Hitman, Rise of The Tomb Raider and Quantum Break. In all of which AMD's current GCN architecture made a strong showing.

Low level graphics APIs like DirectX 12, Vulkan and even AMD's Mantle before them attempted to address manyissues that game developers were facingwith APIs of the timelike DX11 and OpenGL. But one major issue that they attempted to solve and have successfully addressed is one that's related to CPUs.

While graphics processing units are responsible for doing the grand majority of allthe computationnecessary for the visuals of any modern game, there's a lot of work that GPUs are inherently very inefficient at doing. GPUs are vast parallel engines that absolutely excel at doing a huge amount of computational work in parallel.If we wantedto process colors for millions of pixels tens of times every second a parallel engine issimply perfect for the job, and that's why GPUs are the most widely used parallel processors in the world.

CPUs are only made up of a handful of execution engines rather than thousands of cores like GPUs. CPUs differ from GPUs in several key areas, generally they have a lot more decode and branch prediction resources because they tend to deal with more complex branchy code. GPUs on the other hand are designed with heavy emphasis on execution resources. Because GPUs deal with code that is relatively less complex and data that’s massively more parallel. Thisin turn means that the weight would fall on the execution engines rather than the front end of the processor having to deal with the complexity of the code.

This is why in applications like games, filled with parallel and serial code, CPUs & GPUs working together in harmonyis essential. And so much of DirectX 12's improvements come from improving upon this relationship, especially in cases where CPUs with high core counts are in use.

This is why multi-core CPUs with high core counts are going to play a much more prominent role in games. And we're seeing evidence of this already.Intel is launching its first ever 10 core desktop CPU next year as the flagship of the Broadwell-E family of CPUs. What's even more interesting is that it took Intel four years and three different generations of products to jump from sixcores to eight cores at the high-end since it introduced its very first six core desktop "Gulftown" CPUsin 2010. This time however, Intel is jumping straight from 8 cores with Haswell-E to 10 cores with Broadwell-E immediately and only after one generation of products.

One could argue that this haste has been prompted by the next generation of low level API's, or alternatively one could argue that this is a knee jerk reflex to AMD, Intel's only competitor in this space, finally re-entering the high-end CPU segment next year.

Zen is undoubtedly one of the most importantproducts for AMD this year as itmarks the company’s re-entry to the high-end desktopCPU segment with a brand new, clean slate, microarchitecture after roughly half a decade of complete absence. Zen's design began in 2012 and was led by prolific CPU architect Jim Keller, the same man whowas responsible for designing the most successful productsin Athe company'shistory, the AthlonXP and Athlon64 processors.

Zen represents one of themost significant architectural performance leapswe've seen from the company in years.The company isplanning to introduce Zen to the high-end desktop segmentlater this year with high core count SKUs, support for DDR4 and a brand new set of motherboards based on the upcoming AM4 socket.

With major virtual reality launches thisyear, in addition to Polaris, Zen and next generation low level APIs such as DirectX 12 games there's immense momentum going into the second half of the year for AMD. Momentum that's been building up over years and is yet to peak.