Advanced Micro Devices, Inc. (NASDAQ:AMD) fortunes returned back to the same situation of pre-Tuesday. Following the denial of Intel Corporation (NASDAQ:INTC) on licensing of graphics, the stock surrendered all the gains that it managed to get it on Tuesday after reports suggested that both the company are on the verge of signing a deal. The news gained ground mainly because of the expiry of licensing deal with NVIDIA Corporation (NASDAQ:NVDA) with which Intel did not have a great relationship.
Intel reacted to reports and refuted that it is in the process of licensing graphics technology. Fudzilla published a report on Tuesday that a deal between the two firms were confirmed. At the same time, the company was not ready to totally refute that it could reach a deal with AMD. That was a clear indication when the company has reportedly revealed that no additional details could be provided.
As long as the chip maker has not renewed its license with NVIDIA, possibility of the two companies coming together cannot be ruled out totally. For the time being, both the companies might be interested in keeping the issue secret until the decks are cleared from every aspect, including legal since Intel was ordered to pay a fine spreading over a five-year period.
Interestingly, the development came around the time Advanced Micro Devices was holding its analyst day. The company’s failure to highlight anything on the possible licensing deal also hurt investors’ sentiments, who punished the stock on Wednesday. However, analysts’ are not worried about the developments and remain positive on the stock after the analysts’ day meet.
For instance, Wells Fargo & Co (NYSE:WFC) has reiterated its Outperform rating while lifting the target price to $15 from $14 on Wednesday. Other brokerages like Mizuho and BMO Capital Markets have reiterated their rating of Buy and Outperform respectively. Phillip Securities initiated coverage with a Buy rating and a target price of $14.5. Only one brokerage, i.e. Loop Capital, has downgraded the stock to a Hold rating from Buy. One of the main reasons for the analysts to retain their rating on AMD stock is that the roadmap for product remains on track.
Though AMD stocks dropped 12.16 percent during the regular hours, the stock managed to gain 0.45 percent in after-hours trading on Wednesday.