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. Nasdaq Advanced Micro Devices ’ $35 billion acquisition of Xilinx has upended the thesis around AMD stock, causing sellers to outnumber buyers in the … Moreover, he reports that AMD’s central processing units (CPUs) are more popular than CPUs from Intel (NASDAQ:INTC). 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. 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 was going to be valued at $35 billion, so the net effective reduction in P/E ratios would be lower. Therefore, follow the lead of the Wells Fargo analyst, Rakers, who seems to know what’s up with AMD stock. On January 19 at 4 p.m. 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 … On Dec. 18, Barron’s reported that a Wells Fargo analyst, Aaron Rakers, recommended four semiconductor companies, one of which was AMD stock. Chipmaker AMD also reported … The terms of the deal will give Xilinx stockholders about 1.7 AMD shares for each of their Xilinx shares. I wrote about that deal at the end of September and how Nvidia lowered its P/E ratio just like AMD has. At the same time, AMD has mergers and acquisitions (M&A) plans of its own. Privacy Notice 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. AMD. 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. Do Not Sell My Personal Information. This implies a potential 25% gain in the stock if it hits that price target. Product and markets. By the way, Wells Fargo has the highest rating and price target among a group of 20 analysts that TipRanks follows on AMD stock. Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock 2. As long as they love AMD, I think you can see the stock continue to move up. Intel , one of AMD's longtime rivals, ended trading down more than 2%. 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. Xilinx shares closed up over 8.5%. “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. 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.. "Our acquisition of Xilinx … 732, This story has been shared 652 times. 652, © 2021 NYP Holdings, Inc. All Rights Reserved This is despite the high valuation that AMD stock sports, which I have written about before. 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 … Mark Hake runs the Total Yield Value Guide which you can review here. All rights reserved. I suspect that more analysts will begin raising their price targets on AMD stock as they assimilate the benefits of the Xilinx deal. 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. The stock traded in the … Based on the deal's details, AMD will give 1.7234 shares of stock for everyone, one share of Xilinx stock. 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. Copyright © AMD formally announced this week it intends to acquire FPGA maker Xilinx for $35 billion, not $30 billion as originally rumored. 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. 2021 InvestorPlace Media, LLC. Terms of Use 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. 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. I showed how AMD could use its high-priced stock profitably to buy a rival. 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 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. The deal is now official after rumors began swirling earlier this … Shares of Santa Clara, California-based AMD … AMD Stock Falls, While Xilinx Stock Surges. 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. 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. Xilinx closed at $105.99 on Thursday, giving it a market capitalization of $25.9 billion, about a quarter of AMD’s value. This story has been shared 1,307 times. AMD stock … quotes delayed at least 15 minutes, all others at least 20 minutes. Advanced Micro Devices Inc. announced Tuesday morning that it plans to acquire Xilinx Inc. in an all-stock deal valued at $35 billion, confirming … Even though much of the benefits are clearly already seen in the AMD stock price, at least the company is using shares. Advanced Micro Devices (NASDAQ: AMD) agreed to buy Xilinx for $35 billion in stock. 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. Xilinx ended November with a market capitalization of roughly $35.6 billion. For example, rival Nvidia (NASDAQ:NVDA) recently bought Arm Limited, the U.K. semiconductor unit of Softbank (OTCMKTS:SFTBY). AMD's all-stock purchase will grant current Xilinx shareholders 1.7234 shares of AMD for each Xilinx share they own. 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/. I analyzed how this would actually lower the overall price-earnings (P/E) ratio for AMD on a combined basis. Do Not Sell My Personal Information, Your California Privacy Rights On the stock market today, AMD stock fell 4.1% to 78.88.Xilinx stock jumped 8.6% to 124.35. 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. Also known as machine learning, many large companies are already employing this technology. Your California Privacy Rights A Xilinx chip, … Xilinx stock was on track to open at the highest level seen during regular-session hours since July 2019. Barron’s suggested that these stocks could rise further in 2021 based on the report by Wells Fargo. AMD will exchange 1.7234 shares of newly printed stock for each Xilinx share, representing a cash value per Xilinx … Xilinx’s stock, which previously soared on … It paid a mixture of cash and stock valued at $40 billion to buy this chip unit. In addition, he argues that this trend will continue. 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After weeks of speculation , AMD confirmed Tuesday that it will acquire programmable chip maker Xilinx in an all-stock deal valued at $35 billion. 1,307, This story has been shared 732 times. Your Ad Choices At Thursday's close, the company had a … AMD will acquire Xilinx for $35 billion. About half … AMD is ramping up production of its Zen-3 Epyc Milan CPUs. 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. AMD stock fell more than 4.0 percent yesterday to finish at $78.88 after the company announced its deal to acquire Xilinx. The deal was going to be valued at $35 billion, … This article by Wordstream shows how 10 companies are using machine learning by manipulating large data sets. For example, as a group, their average target price is only $94.18. AMD shares closed more than 4% lower on Tuesday at $78.88. 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. Therefore, as a result of this avant garde acquisition, analysts are now singing the praises of AMD stock. The article points out that data centers are essentially what is known as “the cloud” for us laypeople. AMD is at the forefront of where the action is in terms of who really needs and buys large amounts of semiconductor chips. That’s not good news for AMD, Nvidia, Intel, Arm or Xilinx. All rights reserved. 1125 N. Charles St, Baltimore, MD 21201. Sitemap 1125 N. Charles St, Baltimore, MD 21201. 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. Computer-chip designer AMD will buy industry peer Xilinx in a $35 billion all-stock deal, the companies announced Tuesday. Sorry, your blog cannot share posts by email. As a result, AMD is gaining market share from Intel. 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This will have the effect of lowering the overall P/E ratio for the combination. NYC eateries beg Gov. Once the deal closes, the company's stock will be converted into AMD shares. The rumors were true, only the price was off. 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. 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. Post was not sent - check your email addresses! AMD shareholders will own about 74% of the combined firm, with Xilinx shareholders owning the remaining 26%. Thanks for contacting us. 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. Copyright © 2021 InvestorPlace Media, LLC. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. “Our shared cultures of innovation, excellence and collaboration make this an ideal combination,” Peng said in a statement. 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. 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. The P/E ratio would fall from 55x to about 44x. The companies rely on manufacturing partners — namely Taiwan Semiconductor Manufacturing Co., or TSMC — to make their products. Competing in the semiconductor industry is often a game of chess, placing long term bets several moves ahead that culminate for a winning strategy. So, Rakers is one of the few who has consistently beaten the group and so investors might want to pay attention to his predictions. 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