U.S. tech licensing firm Adeia (NASDAQ:ADEA) has filed two lawsuits against Advanced Micro Devices (NASDAQ:AMD) in the Texas federal court, alleging the chip giant infringed on ten patents related to semiconductor innovations, ahead of its earnings.
The move came as Adeia’s shares fell 16% on Monday, after the company lowered annual revenue expectations and posted estimate-missing third-quarter results.
Adeia Demands ‘Fair And Reasonable’ Arrangement
The lawsuits filed on Monday said several models of AMD processors used in desktops, laptops, and servers violate Adeia’s patent rights in inventions for improved semiconductor manufacturing.
Specifically, AMD processors that include “3D V-Cache” technology, including its AI chips, were made using Adeia’s patented methods, according to the company.
“After prolonged efforts to reach a mutually agreeable resolution without litigation, we believe this step was necessary to defend our intellectual property from AMD’s continued unauthorized use,” Adeia said in a statement, noting that AMD’s use of its technology has “greatly contributed to their success as a market leader.”
AMD, one of the largest U.S. semiconductor companies, did not immediately respond to Benzinga‘s request for comment.
San Jose, California-based Adeia said it is open to reaching a “fair and reasonable arrangement” with AMD, and has sought an unspecified amount of monetary damages and a court order for AMD to stop using its patented technology.
What’s Going On With Adeia Stock?
Shares in Adeia dropped to $14.30 on Monday, after the company lowered its full-year revenue and net income expectations, citing that the license agreement it had been pursuing with AMD is now unlikely to be finalized in the fourth quarter as previously expected.
Despite low to moderate growth and value rankings, Adeia stock shows strong momentum and quality, suggesting that long-term momentum is still in play even as short-term sentiment wobbles. This is also reflected in positive price trends across timeframes. For more information on Benzinga’s Edge Rankings, click here.
The stock is up 14% in the past year.
Investors Gear Up For AMD Earnings
AMD is set to report third-quarter earnings after markets close on Tuesday, with average analyst estimates from Benzinga Pro calling for earnings of $1.16 per share on $8.74 billion in revenue.
AMD holds the title as the best-performing S&P 500 stock in November. Its shares closed up 1.38% on Monday, but were down 0.6% after-hours to $258.17 apiece. The stock has more than doubled year-to-date. By contrast, peers Nvidia (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM) rose about 49% and 17% respectively. Intel (NASDAQ:INTC) has risen over 95% year-to-date.
AMD is riding on the back of blockbuster AI deals for its data center chips. Benzinga’s Edge Rankings also point to favorable scores across parameters.
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