Advanced Micro Devices Inc.'s AMD, -2.11% credit rating was upgraded at S&P Global Ratings by one notch to BB from BB-, citing reduced leverage after the semiconductor company repaid $965 million in debt in 2019. The rating still left AMD's credit two notches deep into "junk" territory. The stock dropped 6.9% in afternoon trading Friday, to extend its pullback from Wednesday's record close of $58.90. The outlook remained positive, which means the rating could be raised again. S&P noted that with the repayments, debt principal outstanding has been reduced to $563 million, while a return to positive free cash flow has helped the company increase its cash balances to $1.5 billion. "Although we expect cash balances to decline somewhat in the first half of 2020 as the firm builds inventory in support of strong top-line growth, we believe the firm's conservative financial policy will keep leverage under 1x, and forecast adjusted leverage to reach 0.5x over the next 12 months," S&P said. "The positive outlook on AMD reflects our view that a strong product pipeline will support further market share gains in high-end consumer and server CPU markets, enabling AMD to return to double-digit revenue growth in 2020 as the broader semiconductor market recovers." AMD's stock has run up 34.9% over the past three months, while the PHLX Semiconductor Index SOX, -1.51% has gained 11.4% and the S&P 500 SPX, -1.11% has advanced 7.4%.