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Advanced Micro Devices’ Data Solutions Portfolio Gets a Boost
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Advanced Micro Devices’ Data Solutions Portfolio Gets a Boost

Story Highlights

Advanced Micro has enhanced its business portfolio with the acquisition of a software and hardware firm. This buyout will unleash solid growth opportunities and strengthen AMD’s market footprint.

Advanced Micro Devices, Inc. (NASDAQ: AMD) has expanded its portfolio with the completion of its pending acquisition of Pensando Systems. The deal, worth $1.9 billion, was inked in April 2022.

AMD stock rose 6.6% to close at $98.75 on Thursday.

Pensando is now a part of Advanced Micro’s Data Center Solutions Group. This buyout has enhanced the group’s product offerings through the addition of its platform related to distributed services (including software stack and data processing unit).

Advanced Micro’s Chairman and CEO, Dr. Lisa Su, said that the data center “remains one of the largest growth opportunities for AMD.” He added that the buyout will help “offer cloud, enterprise and edge customers a broader portfolio of leadership compute engines that can be optimized for their specific workloads.”

Meanwhile, Pensando’s Chair of the board, John Chambers, said, “Pensando’s leadership position in software-defined cloud, compute, networking, security and storage services as part of the much larger AMD portfolio is, in my opinion, a perfect fit to shape the data center computing landscape for the next decade.”

Analysts’ Take

Four days ago, Vivek Arya of Bank of America maintained a Buy rating on AMC with a price target of $160 (62.03% upside potential).

Also, 10 days ago, Harsh Kumar of Piper Sandler upgraded AMD’s rating to Buy from Hold while increasing the price target to $140 (41.77% upside potential) from $98. Kumar opines that “the company’s core businesses are running really well.”

Overall, the Street is cautiously optimistic about this $160.7-billion semiconductor company and has a Moderate Buy consensus rating based on 13 Buys and nine Holds. AMD’s average price target of $134.47 suggests 36.17% upside potential from current levels. Over the past year, shares of AMD have grown 25.92%.

Bloggers’ Opinion

As per TipRanks, financial bloggers are 90% Bullish on AMD, compared with the sector average of 67%.

Conclusion

Despite pressures on cash and margins in the near term, the Pensando buyout is expected to boost growth opportunities for Advanced Micro Devices.

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