INTC Agreement May Help AMD Stabilize Market Share

Glen Yeung of Citi has maintained his “buy” rating on Advanced Micro Devices (NYSE: AMD), while raising its earnings estimates for the company. The target price for AMD has been raised from $8.50 to $10.

AMD and Intel (NASDAQ: INTC) have reached an agreement to end their legal disputes on patent cross licensing and antitrust litigation. Citi expects AMD to use its settlement proceeds to reduce its debt liabilities. According to Citi, Global Foundries may deconsolidate faster than expected, which would help AMD achieve its product company margin goals.

This agreement with INTC will also help Advanced Micro Devices stabilize its market share, resulting in higher-than-expected sales in 2010, Citi said.