Shares of Advanced Micro Devices Inc. continued to rise Tuesday as documents revealed the chip maker filed an antitrust lawsuit against competitor Intel Corp. and an analyst said the company may be close to retooling its manufacturing practices.
The company confirmed Monday that it has filed sealed court documents alleging that Intel Corp. used unfair business practices to stop AMD from winning microprocessor contracts with major computer makers. Intel has denied the allegations, claiming it beat AMD with better products.
American Technology Research analyst Doug Freedman said in an interview that there could be a sizable cash payment for AMD if Intel agrees to settle the case.
"I'm not saying there's a settlement here, but there is probably some value in the case and AMD might come out of this better off than some have expected," he said.
Freedman said that Wall Street is also anticipating the launch of AMD's "asset light" program, in which it plans to contract out much of its manufacturing to third-party companies.
Wall St. analysts have long sought such a strategy from AMD, which has been plagued with manufacturing delays and glitches for more a year. The delays lead to a sharp decline in AMD's share price last year.
AMD is executing better this year and has a significant product launch coming in June, Freedman said.
Shares of Sunnyvale, Calif.-based AMD jumped 59 cents, or 9 percent, to $7.12, having risen 6 percent on Monday. The stock has traded in the last year between $5.31 and $16.19.
Intel shares rose 33 cents to $23.58.
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