Advanced micro-apparents (Nasdaq: AMD)) could have fallen late NVIDIA (Nasdaq: NVDA)) in the IA Game but his last decision indicates that he is ready to fight and fill the gap over the king of the AI chip.
AMD announced on Monday, AMD has completed its acquisition of $ 4.9 billion from ZT Systems, a large provider of AI infrastructure solutions for global hyperscalers. The company plans to sell ZT’s manufacturing assets once an appropriate buyer is found, while retaining around 1,000 specialized engineers with expertise in Rack systems. These engineers should play a crucial role in fields such as validation and customer tests, which are essential for the deployment of increasingly large, powerful and high intensity of GPU systems. The acquisition is funded using a combination of shares and liquidity.
According to Ruben Roy de Stifel, an analyst classified in the 4% most important of the street pros, the agreement gives AMD a strategic boost.
“We believe that it accelerates and strengthens the positioning of the company in a market dynamic of supply and demand for evolution which is accelerating towards deployments of calculation at the multi-cluster rack scale, especially since DMA moves to the accelerators of the MI400 series,” said Roy.
The former founder and CEO of ZT Systems, Frank Zhang, will join AMD as Vice-President Director of ZT Manufacturing and Roy thinks that he will supervise the transfer of manufacturing activities in ZT, which operates mainly in the United States and Europe. It has been said that this company has generated more than $ 10 billion in income in the past 12 months. Roy thinks that various EMS and ODM suppliers from the white box server could be interested in buying the manufacturing company.
In addition, the former president of ZT systems, Doug Huang, will assume the role of main vice-president of engineering of the data center platform at AMD. He will run the customer design and activation teams, collaborating closely with the commercial unit of AMD data center solutions and the AI group to accelerate the launch of Data Center Solutions.
Roy believes that this infusion of ZT talents is essential to the wider product strategy of AMD. He plans that market demand for AMD accelerators will be propelled by the transition from industry to open source infrastructure. This acquisition has not only the DMA for rapid progress towards ultra -high speed networking solutions – targeting 1.6 t and possibly 3.2T speeds – but also opens the ground to overcome the challenges linked to macroeconomic factors (inflation, interest rate, final market demand) and the complex integration of ZT resources.
So, what is the net profit for investors? Roy has a purchase note on AMD, with a price target of $ 162 – pointing to a potential of increase of 57.5% compared to the location of the action today. (To look at the history of Roy, Click here))
The average price of the street price is a little lower, but at $ 146.87, it still makes room for yields of 12 months of 43%. All in all, on the basis of a mixture of 24 purchases, 12 sockets and 1 sells, the analyst’s consensus prices the stock a moderate purchase. (See Forecast of AMD actions))
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Warning: The opinions expressed in this article are only those of the featured analyst. Content is intended to be used for information only. It is very important to do your own analysis before investing.