Advanced Micro Devices: This Is Why AMD Stock Soared

AMD StockWhy Is AMD Stock on the Rise? 

Advanced Micro Devices, Inc. (NASDAQ:AMD) had quite the day Tuesday, with AMD stock rising by about nine percent after the company reportedly entered a licensing deal with fellow chip-maker, Intel Corporation (NASDAQ:INTC).

AMD stock got a boost as, according to Investors Business Daily, the chip company is said to be licensing its popular “Radeon” graphics processing unit to be used in Intel’s next generation of CPUs. (Source: “Advanced Micro Devices Soars on Rumored Intel Deal,TheStreet, December 6, 2016.)

This would be a big coup for AMD stock, as Intel is currently partnered with rival NVIDIA Corporation (NASDAQ:NVDA). That deal expires in March, which leaves room for AMD to potentially edge out its competitor.

While the Intel deal has yet to be confirmed, AMD stock had other reasons to celebrate as it entered into an extended three-year strategic partnership with software company Mentor Graphics Corp (NASDAQ:MENT) on Monday. The deal is set to expand its creation of an embedded software ecosystem.

This is yet another feather in AMD stock’s cap, which is frankly running out of room in what has been a banner year for the chip producer.

Up nearly 100% since the beginning of 2016, AMD stock became one of the hottest picks this year and is looking to finish strong. Nvidia hasn’t performed too shabbily either, up 184% year-to-date.

It seems that this was the year of the chip and, with these devices being used in the development of deep machine learning and artificial intelligence (AI) development, their success may be poised to continue onward in 2017.

Whether these numbers will sustain themselves, of course, is another question. Either way, investors are quite bullish on the two shares, and this week’s AMD stock win was just another reinforcement of that trend.