The cryptocurrency craze has infected the real world economy, driving up the prices of GPUs (graphics chips used for playing 3-D computer games that are also really good at crypto calculations). Mining Ethereum with GPUs has become an increasingly profitable endeavour largely because the price of Ethereum went up about 170 times from $8.24 at the beginning of 2017 to a peak of around $1400. Mid and high-end GPUs are selling out everywhere, retailing for 2 to 3 times their suggested retail price. PC Part Picker has some good data on market pricing of GPUs such as the Radeon RX 570.
Note that computer hardware normally depreciates over time, roughly halving in price every 1.5 to 2 years due to Moore’s Law. Instead of depreciating, most GPUs have appreciated wildly thanks to rising Ethereum prices.
If the crypto mining market collapses (due to a broad collapse in cryptocurrency prices), I am willing to speculate that AMD’s valuation would better reflects its difficulties in generating profits. Historically AMD has never been a particularly profitable company, losing $7.82B of the $8.34B in capital raised. In YE2017 AMD earned $62M before taxes, buoyed by aggressive accounting (perhaps $40M-97M+?) and unusually high GPU demand (perhaps a few hundred million?). If AMD returns to its money-losing ways, its shares ought to trade closer to its $0.611B book value (plus the value of its x86 license) rather than its current $10.83B market cap.