On Tuesday, Advanced Micro Devices (AMD)’s stock rose, surpassing Nvidia in its rivalry amid its ZT Systems acquisition.
The company’s stock price increased by 4.52% to $155.28 apiece on August 20. However, it is expected to decline by -0.26% to $154.89 per share in the after-hours session.
AMD plans to buy the computer hardware design firm for $4.90 billion as a strategic move to compete with Nvidia. It reported the transaction ahead of the market opening on Monday.
Furthermore, Chief Executive Lisa Su mentioned that she plans to sell ZT’s manufacturing sector and retain its systems design business.
Moreover, it aims to close the cash-and-stock deal in the first half of 2025. The Santa Clara, California-based entity is paying for ZT with 75.00% and 25.00% in stock.
According to AMD, acquiring the server maker is forecasted to be accretive to adjusted earnings by the end of 2025.
Last week, the semiconductor corporation closed its takeover of the largest private artificial intelligence (AI) lab in Europe, Silo AI, for $665.00 million.
Based on trading analyst Jordan Klein, its purchase of ZT acknowledges Nvidia’s tactic of selling self-contained system hardware designs. He added that AMD still needs to excel in this expertise to keep up with the chipmaker, addressing how the cloud hyperscale market goes.
ZT Systems Purchased by AMD for AI Chips Expansion
AMD announced that it will acquire ZT Systems for $4.90 billion to expand its AI chips portfolio and hardware.
Purchasing the company highlights the computing requirements for AI. It includes stringing together thousands of chips in clusters to reach the required data crunching horsepower. Also, it stresses the importance of the number of chips that makeup whole server systems.
Adding engineers from ZT Systems will enable AMD to launch its latest AI graphics processing units more quickly, similar to the scale of Microsoft.
