NEW YORK (TheStreet) -- Advanced Micro Devices (AMD - Get Report) shares are skyrocketing by 25.19% to $3.28 in Friday's pre-market trading session, on the announcement that the company is licensing technology to a Chinese, state-backed joint venture that will produce chips there. 

The company will largely benefit through licensing and royalty collection from the x86 chip technology it had licensed to a new venture it's forming with Tianjin Haiguang Advanced Technology InvestmentMKM Partners noted, as it upgraded the stock to "buy" from "neutral" this morning. 

Under the deal, the Sunnyvale, CA-based semiconductor company is projected to receive $293 million in licensing fees plus royalties on sales of the chips developed by the joint venture.

This announcement was made at the same time the company released better-than-expected 2016 first quarter financial results yesterday afternoon, posting a loss of 14 cents a share, compared to Wall Street's forecasts of a loss of 15 cents a share. 

Revenue dropped by 19% year-over-year to $832 million, but beat analysts' estimates of $818.2 million.

Shares were also getting a boost from the company's upbeat second quarter outlook, as it anticipated revenue to increase by 12% to 18% from the previous quarter, which would be $932 million to $982 million, above consensus for $890 million for the June quarter.