Wedbush ‘cautiously optimistic’ ZT deal will add value to AMD

Wedbush believes the ZT acquisition was likely both “strategic and opportunistic” for AMD (AMD). The firm says AMD was able to purchase ZT at a discount likely in part due to changing conditions in the original design manufacturers market and particularly Foxconn’s increased presence within the Nvidia (NVDA) server supply chain. The relatively attractive deal price may allow AMD to recoup a meaningful portion of its acquisition cost when it sells ZT’s assets, the analyst tells investors in a research note. Wedbush is “cautiously optimistic” on the deal’s value for AMD. It also sees AMD’s willingness to spend $4B on the acquisition as a signal that prospects for the graphics processing units market continue to look robust. The firm keeps an Outperform rating on AMD with a $200 price target.