Advanced Micro Devices (AMD) stock closed up 8.87% to $9.45 on Tuesday following reports that the global semiconductor company inked a licensing deal with rival technology firm Intel (INTC) .

Advanced Micro is reportedly licensing its Radeon graphics processing unit for use in Intel's next generation of CPUs, Investors Business Daily reports. Intel currently holds a license for chipmaker Nvidia's (NVDA) technology, but that deal is set to expire in March.

Although the Intel deal has not yet been confirmed, Advanced Micro Devices did tie up an extended three-year strategic partnership with software company Mentor Graphics (MENT) on Monday which will expand their agreement to create an embedded software ecosystem.

About 92.07 million shares of Sunnyvale, Calif.-based Advanced Micro traded hands on Tuesday, well above the 30-day average volume of roughly 48.59 million.

Additionally, TheStreet's Jim Cramer recently identified Advanced Micro as a potential takeover candidate for 2017. Cramer noted that Advanced Micro makes chips in the "hottest" area of semiconductors: gaming.

The company could get purchased by fellow chipmaker Micron Technology (MU) , according to Cramer. The deal could boost Micron's exposure to fast-growing markets, allowing the company to escape the cell phone and tablets spaces.

Micron stock also rose on Tuesday, climbing 2.42% to close at $19.06.