Report: AMD close to buying ATI

As much as analysts aren't always right, they aren't always wrong, either. In May, RBC Capital Markets analysts said microprocessor manufacturer AMD was considering an acquisition of graphics-card maker ATI Technologies.

Today, Reuters is reporting that AMD is close to a deal that would see it acquire ATI for $5.5 billion, citing "a source familiar with the situation" for the info. The source said a deal could be announced as soon as Monday.

In suggesting the purchase in May, the RBC analysts noted that the idea of Intel or AMD purchasing a graphics-chip maker has been batted around for a while, and pointed out AMD's stated intent to increase its capacity in the coming years. As for ATI being chosen for acquisition instead of a rival company like Nvidia, the pair called ATI "a rare buy in the semiconductor space right now."

ATI stock has lost almost 5 percent of its value since the end of May, but shares closed up more than 5 percent today to close at $16.56. Meanwhile, AMD has been taking a beating of late, losing more than 40 percent of its share value since May. Today alone, the stock dropped almost 16 percent to close at $18.26, and is down further in after-hours trading.