AMD’s stock rallies after credit rating gets 3-notch boost to lift it out of ‘junk’ territory

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Shares of Advanced Micro Devices Inc. rose 1.3% in premarket trading Friday, after its credit rating got a 3-notch boost at Moody’s Investors Service, to lift the rating out of “junk” territory. Moody’s raised AMD’s senior unsecured rating to Baa3, which is the credit rating agency’s lowest investment-grade rating, from Ba3. The outlook was revised to stable from positive. Moody’s said the new credit profile reflects the chip maker’s strong performance and outlook, driven by continued design wins, market share gains and an expanded set of product offerings and customers. In addition, Moody’s said the investment grade rating reflects the release of security on AMD’s previously secured $500 million credit facility. “With recent new product launches, we expect strong revenue growth in 2020 driven by new desktop, mobile, server, and graphics chips, and the launch of semi-custom revenue related to game consoles in the second half of 2020,” Moody’s said. AMD’s stock has run up 72.2% year to date through Thursday, while shares of rival Intel Corp. have dropped 18.2% and the S&P 500 has edged up 3.4%.
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