Wedbush: Advanced Micro Devices Announces Agreement

According to a research report released today by Wedbush, Advanced Micro Devices AMD has announced an amended wafer supply agreement with GLOBALFOUNDRIES. Wedbush said in the report, “AMD's amended wafer supply agreement with GF includes (1) fixed wafer pricing, (2) GF to waive AMD's $430MM payment obligation from the 2011 WSA, (3) a cash payment of $425MM to be paid to GF over two fiscal years, and (4) AMD to transfer to GF its remaining ownership in the company. We view the supply agreement as a positive and reiterate our OUTPERFORM rating and $9PT on AMD. We see the pull back in the stock as an opportunity for investors to add to positions as we believe the hard disk drive industry recovers throughout 2012, AMD will benefit from (1) APU share gains in mainstream and performance notebooks and (2) the adoption of Bulldozer core CPUs in servers driving strong Q/Q earnings and revenue growth.” Advanced Micro Devices is currently trading at $6.90.