Wells Fargo Securities maintained a "buy" rating on AMD after rival chipmaker Intel agreed to cease and desist its anti-competitive marketing efforts in Japan.
"Although we are not changing our revenue estimates at this time, we estimate that about $220 million of processor revenues in the region could shift to Advanced Micro Devices, or 3.5% of our fiscal 2006 total AMD revenue projection," said Wells Fargo Securities.
The Japanese Free Trade Commission said Intel illegally used rebates to limit customers' ability to purchase competing processors, according to Wells Fargo. "Investors should also keep in mind that an investigation of Intel's marketing practices in Europe is also underway, with what we perceive to be slightly less potential favorable impact for AMD, which has a more established presence in that region," Wells Fargo said.
The research firm maintained a price target of $25 for AMD. "The shares continue to offer some of the highest potential gain within our coverage universe, in our opinion," said Wells Fargo. "Investors should also note the low price-to-trailing-12-months'-revenues aspect of the valuation."