Why Advanced Micro Devices, Inc. (NASDAQ:AMD) Shares Are Trading Up Over 7%?

Why Advanced Micro Devices, Inc. (NASDAQ:AMD) Shares Are Trading Up Over 7%?


Has fortunes for Advanced Micro Devices, Inc. (NASDAQ:AMD) changed in two weeks? The stock suffered about 24.23 percent drop on May 2 after the earnings announcement on May 1 after the market closed. Today, the stock is surging more than seven percent. Investors appear to be returning to the stock after reports emerged that Intel Corporation (NASDAQ:INTC) licensed AMD’s graphics.

In the process, Intel has already dumped NVIDIA Corporation (NASDAQ:NVDA) and did not renew the deal that expired on March 17. However, there is not much reaction from investors on NVIDIA shares. Incidentally, the stock surged a little over 30 percent after the company delivered its earnings results on May 9 after the bell.

As far as Advanced Micro Devices, fudzilla.com reported that Intel and AMD have struck a deal with SVP and Chief Architect, Radeon Technologies Group, Raja Koduri, playing a key role in it. Now the question when the agreement will start and when the two companies will announce their agreement. Their cooperation would enable Intel to get access to graphics Intellectual Properties apart from most things of Radeonish. Though both are competitors, when it comes to graphics both are said to be close.

One of the reasons Intel preferred not to renew its deal with NVIDIA is that it has several disagreements on Nforce chipset, as well as, the licensing. As a result, Intel had to pay $1.5 billion over the five-year period after it was sued and coerced into a settlement. Now that the company is coming out of that agreement, Intel could decide its own choice now.

In any case, any deal with Intel could be a gain for AMD. Therefore, fortunes could be changing for the better.

At time of writing this, AMD shares jumped 7.88 percent while Intel edged up 0.06 percent. NVIDIA shares are also trading up 1.15 percent.