Arteris (AIP) stock rallied about 56% in Monday’s extended trading session after announcing a licensing deal with chip giant Advanced Micro Devices (AMD). Specifically, Arteris stated that AMD licensed its FlexGen network-on-chip (NoC) interconnect IP (intellectual property) for its next generation of AI chiplet design.
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Arteris offers system IP that is used in semiconductors to accelerate the creation of high-performance, power-efficient silicon.
Arteris Expected to Gain from AMD Deal
Arteris’ FlexGen smart NoC IP will be used by AMD in semiconductor designs to enhance product performance and efficiency.
The company added that FlexGen will provide high-performance data transport in AMD chiplets, powering artificial intelligence (AI) across the latter’s broad portfolio spanning data centers to edge and end devices.
The agreement expands the relationship between the two companies, with Arteris’ technology now set to play a vital role in AMD’s broad AI computing portfolio. A deal with a large chip company like AMD is expected to boost Arteris’ prospects.
Deal Ahead of Q2 Earnings
Interestingly, this deal comes ahead of the Q2 earnings of both companies. Arteris is scheduled to announce its second-quarter results after the market closes on Tuesday, August 5. Wall Street expects Arteris to report a slightly narrower loss per share of $0.10 compared to $0.11 in the prior-year quarter. Revenue is expected to rise 11.6% year-over-year to $16.27 million.
Meanwhile, all eyes are on Advanced Micro Devices’ Q2 results on August 5. Wall Street expects AMD to report earnings per share (EPS) of $0.48, reflecting a 30% year-over-year decline. Meanwhile, revenue is estimated to grow by 27% to $7.41 billion.
Wall Street’s Ratings on AIP and AMD Stocks
Analysts have a Strong Buy consensus rating on Arteris stock based on three unanimous Buys. The average AIP stock price target of $14 indicates 48.2% upside potential from current levels. AIP stock is down 7.3% year-to-date.
Meanwhile, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock based on 24 Buys, 10 Holds, and one Sell recommendation. The average AMD stock price target of $156.47 indicates a downside risk of 11.5% from current levels.
