Once the deal closes, the company's stock will be converted into AMD shares. Your Ad Choices So, Rakers is one of the few who has consistently beaten the group and so investors might want to pay attention to his predictions. Two weeks later, The Wall Street Journal reported AMD had reached an agreed deal to buy a rival chipmaker, Xilinx (NASDAQ: XLNX), using AMD stock. The deal is now official after rumors began swirling earlier this … The companies rely on manufacturing partners — namely Taiwan Semiconductor Manufacturing Co., or TSMC — to make their products. Terms of Use Advanced Micro Devices (NASDAQ:AMD) keeps moving higher as analysts offer up higher price target recommendations. “Our shared cultures of innovation, excellence and collaboration make this an ideal combination,” Peng said in a statement. For example, Rakers argues that AMD’s data center processors will meet the need for more chips that can process the large amounts of data they use. Xilinx stock was on track to open at the highest level seen during regular-session hours since July 2019. On January 19 at 4 p.m. Do Not Sell My Personal Information. Advanced Micro Devices ’ $35 billion acquisition of Xilinx has upended the thesis around AMD stock, causing sellers to outnumber buyers in the … Under the deal, Xilinx shareholders will receive about 1.7 shares of AMD common stock for each share of Xilinx common stock, valuing Xilinx at $143 per share, or about 24.8% higher than its $114.55 closing price on Oct. 26. AMD Stock Falls, While Xilinx Stock Surges. Privacy Notice Advanced Micro Devices (AMD) - Get Report agreed to buy rival Xilinx (XLNX) - Get Report for $35 billion in stock. Article printed from InvestorPlace Media, https://investorplace.com/2020/12/amd-stock-is-a-favorite-of-analysts-after-buying-xilinx/. As long as they love AMD, I think you can see the stock continue to move up. But it still shows how powerful this tool is – using your highly valued shares to buy a rival that has a lower P/E ratio. AMD is at the forefront of where the action is in terms of who really needs and buys large amounts of semiconductor chips. 1,307, This story has been shared 732 times. Sorry, your blog cannot share posts by email. AMD shareholders will own about 74% of the combined firm, with Xilinx shareholders owning the remaining 26%. This was based on a $30 billion takeover price. Product and markets. In the date of publication, Mark R. Hake did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. The stock traded in the … Xilinx’s stock, which previously soared on … Chipmaker Advanced Micro Devices has bright prospects in its core businesses and from its pending acquisition of Xilinx (), a Wall Street analyst said Monday.Meanwhile, AMD stock … 1125 N. Charles St, Baltimore, MD 21201. The deal was going to be valued at $35 billion, so the net effective reduction in P/E ratios would be lower. Xilinx ended November with a market capitalization of roughly $35.6 billion. The Financial Times article explains that the chips that AMD and Xilinx make, known as FPGAs, help neural networks by acting as accelerators for “deep learning.” Neural networks are necessary for artificial intelligence (AI) applications in various industries. It paid a mixture of cash and stock valued at $40 billion to buy this chip unit. AMD will exchange 1.7234 shares of newly printed stock for each Xilinx share, representing a cash value per Xilinx … Under the terms of the agreement, Xilinx stockholders will receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction. Chipmaker AMD also reported … Analysts Keep Upgrading AMD Stock Despite Its High Valuation, 7 Undervalued Stocks That Could Soar in 2021, long-term winners as a chip supplier for data centers, four semiconductor companies, one of which was AMD stock, Rakers lifted his price target on AMD stock to $120, 17 Stocks to Buy to Play the Shift to Transportation 2.0, The Dip Is an Opportunity: Ethereum Will Reach New Highs, Matt McCall and the InvestorPlace Research Staff, Beyond Meat’s Partnership With Taco Bell Underscores Why BYND Stock Is a Buy, 7 Stocks That Could Make You a Millionaire, CCIV Stock: 14 Air EV Facts to Know Ahead of Lucid Motors SPAC Merger, VDRM Stock: 13 Things to Know as Penny Stock ViaDerma Rockets 1,000%, GE Stock Is Poised for a Major Turnaround, 10 Best Stocks To Buy On The Nasdaq Right Now. Competing in the semiconductor industry is often a game of chess, placing long term bets several moves ahead that culminate for a winning strategy. The article points out that data centers are essentially what is known as “the cloud” for us laypeople. The acquisition, expected to close by the end of next year, will create a combined semiconductor giant with 13,000 engineers and more than $2.7 billion in annual research and development investment, the California-based companies said. According to TipRanks, Rakers lifted his price target on AMD stock to $120 from $100. The rumors were true, only the price was off. Both companies are looking to increase their market gains in the lucrative data center market for advanced CPU chips. Your California Privacy Rights Computer-chip designer AMD will buy industry peer Xilinx in a $35 billion all-stock deal, the companies announced Tuesday. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. 652, © 2021 NYP Holdings, Inc. All Rights Reserved Advanced Micro Devices (NASDAQ: AMD) agreed to buy Xilinx for $35 billion in stock. This story has been shared 1,307 times. The terms of the deal will give Xilinx stockholders about 1.7 AMD shares for each of their Xilinx shares. Computer-chip designer AMD will buy industry peer Xilinx in a $35 billion all-stock deal, the companies announced Tuesday. As per the deal, Xilinx stockholders would receive a fixed exchange ratio of 1.7234 shares of AMD common stock for each share of Xilinx common stock they hold at the closing of the transaction. AMD formally announced this week it intends to acquire FPGA maker Xilinx for $35 billion, not $30 billion as originally rumored. News of the tie-up sent Xilinx’s stock price nearly 10 percent in premarket trading to $125.96 as of 7:12 a.m. Tuesday, while AMD’s shares fell 4.4 percent to $78.58. For example, as a group, their average target price is only $94.18. Thanks for contacting us. For example, Yelp (NYSE:YELP) uses machine learning to manage images, Pinterest (NYSE:PINS) uses it for content discovery, and Facebook (NASDAQ:FB) uses AI to screen out spam, etc. The blockbuster acquisition will unite two leading developers of semiconductors and further ramp up AMD’s bid to challenge Silicon Valley titan Intel, particularly in the rapidly growing data center business. Xilinx, which was valued over $10B at that time, had the reputation as an industry powerhouse whereas AMD's reputation was that of a weakling. On the stock market today, AMD stock fell 4.1% to 78.88.Xilinx stock jumped 8.6% to 124.35. quotes delayed at least 15 minutes, all others at least 20 minutes. Therefore, as a result of this avant garde acquisition, analysts are now singing the praises of AMD stock. Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock 2. That’s not good news for AMD, Nvidia, Intel, Arm or Xilinx. Nasdaq AMD is ramping up production of its Zen-3 Epyc Milan CPUs. I want to learn more about the financial structure of the deal, but my first pass is that AMD must be doing something right here. Both AMD and Xilinx develop processors that are used in devices such as computers, gaming systems and data centers that power internet-based services and applications. A Xilinx chip, … Since my last article on Oct. 15, where I pointed out that AMD stock was at 55x forward earnings, it has risen over 9% to nearly $92. AMD will acquire Xilinx for $35 billion. 2021 InvestorPlace Media, LLC. This will have the effect of lowering the overall P/E ratio for the combination. I talked to AMD CEO Lisa Su last night and got the download on what could be a historic, $35B semiconductor deal to acquire Xilinx. NYC eateries beg Gov. Advanced Micro Devices Inc. announced Tuesday morning that it plans to acquire Xilinx Inc. in an all-stock deal valued at $35 billion, confirming … We've received your submission. On Dec. 18, Barron’s reported that a Wells Fargo analyst, Aaron Rakers, recommended four semiconductor companies, one of which was AMD stock. This is despite the high valuation that AMD stock sports, which I have written about before. Two weeks later, The Wall Street Journal reported AMD had reached an agreed deal to buy a rival chipmaker, Xilinx (NASDAQ:XLNX), using AMD stock. Barron’s suggested that these stocks could rise further in 2021 based on the report by Wells Fargo. Also known as machine learning, many large companies are already employing this technology. Based on the deal's details, AMD will give 1.7234 shares of stock for everyone, one share of Xilinx stock. AMD Agrees to Buy Xilinx for $35 Billion in Stock The deal would broaden AMD’s business into chips for markets like 5G communications and automotive electronics. As a result, AMD is gaining market share from Intel. Mark Hake runs the Total Yield Value Guide which you can review here. The Financial Times recently wrote that this deal shows that Advanced Micro Devices (AMD) is one of the long-term winners as a chip supplier for data centers. All rights reserved. AMD stock fell more than 4.0 percent yesterday to finish at $78.88 after the company announced its deal to acquire Xilinx. In addition, he argues that this trend will continue. AMD stock … Copyright © I analyzed how this would actually lower the overall price-earnings (P/E) ratio for AMD on a combined basis. AMD’s stock, which was up 79% on the year as of Monday’s close, was down 4.1% in Tuesday trading to $78.88. About half … AMD’s better-performing products have helped it capture nearly 20 percent of the market for central processor units, which has driven its stock price up 68 percent this year as of Monday. AMD's Rumored $30 Billion Xilinx Acquisition Could Supercharge the Stock This deal could turn out to be a big catalyst in the long run. ET, the man who recommended Google before anyone else will reveal his #1 stock pick for 2021 — for FREE — ticker symbol and all — in a special presentation. Even though much of the benefits are clearly already seen in the AMD stock price, at least the company is using shares. 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Therefore, follow the lead of the Wells Fargo analyst, Rakers, who seems to know what’s up with AMD stock. The deal comes as AMD snaps up a greater share of the market from Intel, which still manufactures its own chips but has struggled to match the quality of those produced by TSMC. "Our acquisition of Xilinx … This morning, Advanced Micro Devices (AMD) announced that it has agreed to buy rival chipmaker Xilinx in a $35 billion all-stock deal—its largest acquisition to date.. AMD's all-stock purchase will grant current Xilinx shareholders 1.7234 shares of AMD for each Xilinx share they own. Post was not sent - check your email addresses! “Our acquisition of Xilinx marks the next leg in our journey to establish AMD as the industry’s high performance computing leader and partner of choice for the largest and most important technology companies in the world,” AMD president and CEO Lisa Su said in a statement. At Thursday's close, the company had a … It's still looking to complete its announced deal to buy Xilinx (NASDAQ:XLNX). This implies a potential 25% gain in the stock if it hits that price target. Xilinx closed at $105.99 on Thursday, giving it a market capitalization of $25.9 billion, about a quarter of AMD’s value. All rights reserved. The deal was going to be valued at $35 billion, … AMD’s stockholders will own about 74 percent of the combined company, while Xilinx shareholders will control the other 26 percent, according to a news release. I showed how AMD could use its high-priced stock profitably to buy a rival. The deal could be transformative for AMD, providing a huge boost for its ambitions to become a major player in the data center industry and bumping the company's expertise with over 13,000 engineers and more than $2.7 … 732, This story has been shared 652 times. Sitemap For Xilinx’s part, president and CEO Victor Peng said the deal will help speed up the growth of its data center business and “enable us to pursue a broader customer base across more markets.” He’ll be a president in charge of the Xilinx business at the combined company, which Su will lead as CEO. Shares of Santa Clara, California-based AMD … Do Not Sell My Personal Information, Your California Privacy Rights I wrote about that deal at the end of September and how Nvidia lowered its P/E ratio just like AMD has. By the way, Wells Fargo has the highest rating and price target among a group of 20 analysts that TipRanks follows on AMD stock. Copyright © 2021 InvestorPlace Media, LLC. Moreover, he reports that AMD’s central processing units (CPUs) are more popular than CPUs from Intel (NASDAQ:INTC). Xilinx shares closed up over 8.5%. 1125 N. Charles St, Baltimore, MD 21201. For example, rival Nvidia (NASDAQ:NVDA) recently bought Arm Limited, the U.K. semiconductor unit of Softbank (OTCMKTS:SFTBY). I suspect that more analysts will begin raising their price targets on AMD stock as they assimilate the benefits of the Xilinx deal. AMD shares closed more than 4% lower on Tuesday at $78.88. Intel , one of AMD's longtime rivals, ended trading down more than 2%. After weeks of speculation , AMD confirmed Tuesday that it will acquire programmable chip maker Xilinx in an all-stock deal valued at $35 billion. Current Xilinx shareholders 1.7234 shares of AMD stock of its own this based. Yield Value Guide which you can review here analyzed how this would actually lower the overall (! September and how Nvidia lowered its P/E ratio for the combination already seen in the traded! Xilinx share they own “ Our shared cultures of innovation, excellence and collaboration this. Result of this avant garde acquisition, analysts are now singing the of. 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