Considering AMD's graphics unit alone is worth more than AMD's current $2.81 billion market cap, investors would be utterly stupid NOT to buy shares in AMD at the current ~$4.00 price. No matter how you slice it, anybody investing in AMD at $4/share can't miss making money. It's like hitting the side of a barn with a gun from 10 feet away. No matter how you slice it, whether they up their game in the CPU and GPU market or bomb out and get bought out, their x86 license + their graphics division and all the other IP they've accumulated over 40 years is worth a ton of money -- way more than $2.81 billion, and the potential suitors who'd like to own AMD's IP and technologies include but are not limited to nVidia and Apple.
Scenario 1 - nVidia and AMD merger:
In this scenario, a potential technology juggernaut emerges when the resulting merged company has world-leading GPU monopoly, an x86 license with cutting edge CPU products, and arguably the best ARM processor out there. This is my ideal scenario. Really, why the hell have nVidia and AMD been trying to beat each other senseless when the REAL enemy, Intel, is just laughing the whole time in the background. Instead, nVidia and AMD should merge and kick Intel's smug ass.
Scenario 2 - Apple buys AMD with pocket change:
In this scenario, Apple looks under the couch cushions and finds the $8-$10billion necessary to buy AMD lock, stock and barrel. Suddenly, Apple not only has the best smart phones and tablets, powered by a leading ARM CPU design, they also suddenly get an x86 processor license and world-leading GPU technologies, not to mention APU (fusion) knowhow. With the other $90 billion, Apple then builds better x86 CPUs than Intel (since they can actually outspend Intel, for god's sake!) and enters the HPC/Supercomputing/Server market for the first time in a serious way, and produces the best x86/ARM-based APUs for their own MacBooks/tablets and iPhones. Basically, in this scenario, Apple 'wins the whole game'. Apple could design and build its own CPUs for all its own products from the lowliest smart phone/pod device all the way up to the world's fastest supercomputers. It would pretty well all be over for everybody else, and Apple would become THE company that makes everybody's high tech gadgets/desktops/laptops/tablets/Servers/Supercomputers for at least a full generation. This is NOT my ideal scenario, but it is a very real possibility.