This is despite the high valuation that AMD stock sports, which I have written about before. Based on the exchange ratio, this represents approximately $143 per share of Xilinx common stock 2. 652, © 2021 NYP Holdings, Inc. All Rights Reserved AMD. AMD shareholders will own about 74% of the combined firm, with Xilinx shareholders owning the remaining 26%. For example, as a group, their average target price is only $94.18. 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. We've received your submission. 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. Product and markets. The rumors were true, only the price was off. Your Ad Choices Sorry, your blog cannot share posts by email. About half … 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. Based on the deal's details, AMD will give 1.7234 shares of stock for everyone, one share of Xilinx stock. Nasdaq 2021 InvestorPlace Media, LLC. AMD formally announced this week it intends to acquire FPGA maker Xilinx for $35 billion, not $30 billion as originally rumored. Xilinx ended November with a market capitalization of roughly $35.6 billion. Even though much of the benefits are clearly already seen in the AMD stock price, at least the company is using shares. Your California Privacy Rights I analyzed how this would actually lower the overall price-earnings (P/E) ratio for AMD on a combined basis. After weeks of speculation , AMD confirmed Tuesday that it will acquire programmable chip maker Xilinx in an all-stock deal valued at $35 billion. This story has been shared 1,307 times. I suspect that more analysts will begin raising their price targets on AMD stock as they assimilate the benefits of the Xilinx deal. 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. 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. The deal was going to be valued at $35 billion, … The stock traded in the … NYC eateries beg Gov. This implies a potential 25% gain in the stock if it hits that price target. Competing in the semiconductor industry is often a game of chess, placing long term bets several moves ahead that culminate for a winning strategy. 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. AMD is at the forefront of where the action is in terms of who really needs and buys large amounts of semiconductor chips. So, Rakers is one of the few who has consistently beaten the group and so investors might want to pay attention to his predictions. AMD is ramping up production of its Zen-3 Epyc Milan CPUs. 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 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. Barron’s suggested that these stocks could rise further in 2021 based on the report by Wells Fargo. Xilinx closed at $105.99 on Thursday, giving it a market capitalization of $25.9 billion, about a quarter of AMD’s value. “Our shared cultures of innovation, excellence and collaboration make this an ideal combination,” Peng said in a statement. This article by Wordstream shows how 10 companies are using machine learning by manipulating large data sets. AMD's all-stock purchase will grant current Xilinx shareholders 1.7234 shares of AMD for each Xilinx share they own. 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. At the same time, AMD has mergers and acquisitions (M&A) plans of its own. AMD will exchange 1.7234 shares of newly printed stock for each Xilinx share, representing a cash value per Xilinx … 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. The companies rely on manufacturing partners — namely Taiwan Semiconductor Manufacturing Co., or TSMC — to make their products. Copyright © 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 … 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. Do Not Sell My Personal Information. Intel , one of AMD's longtime rivals, ended trading down more than 2%. Computer-chip designer AMD will buy industry peer Xilinx in a $35 billion all-stock deal, the companies announced Tuesday. A Xilinx chip, … As a result, AMD is gaining market share from Intel. "Our acquisition of Xilinx … Terms of Use All rights reserved. In addition, he argues that this trend will continue. 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. Xilinx shares closed up over 8.5%. 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. Advanced Micro Devices Inc. announced Tuesday morning that it plans to acquire Xilinx Inc. in an all-stock deal valued at $35 billion, confirming … The article points out that data centers are essentially what is known as “the cloud” for us laypeople. Shares of Santa Clara, California-based AMD … 732, This story has been shared 652 times. The P/E ratio would fall from 55x to about 44x. For example, rival Nvidia (NASDAQ:NVDA) recently bought Arm Limited, the U.K. semiconductor unit of Softbank (OTCMKTS:SFTBY). quotes delayed at least 15 minutes, all others at least 20 minutes. 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. 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. 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 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. It paid a mixture of cash and stock valued at $40 billion to buy this chip unit. This was based on a $30 billion takeover price. Computer-chip designer AMD will buy industry peer Xilinx in a $35 billion all-stock deal, the companies announced Tuesday. On the stock market today, AMD stock fell 4.1% to 78.88.Xilinx stock jumped 8.6% to 124.35. This will have the effect of lowering the overall P/E ratio for the combination. Once the deal closes, the company's stock will be converted into AMD shares. Sitemap Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Article printed from InvestorPlace Media, https://investorplace.com/2020/12/amd-stock-is-a-favorite-of-analysts-after-buying-xilinx/. 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The terms of the deal will give Xilinx stockholders about 1.7 AMD shares for each of their Xilinx shares. 1125 N. Charles St, Baltimore, MD 21201. Post was not sent - check your email addresses! 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. Therefore, as a result of this avant garde acquisition, analysts are now singing the praises of AMD stock. According to TipRanks, Rakers lifted his price target on AMD stock to $120 from $100. I wrote about that deal at the end of September and how Nvidia lowered its P/E ratio just like AMD has. 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. Xilinx stock was on track to open at the highest level seen during regular-session hours since July 2019. Advanced Micro Devices (NASDAQ:AMD) keeps moving higher as analysts offer up higher price target recommendations. Armie Hammer’s ex Courtney Vucekovich: He wanted to 'barbecue and eat' me, It seems clear whom Urban Meyer wants as the Jaguars' quarterback, Pregnant influencer's cause of death revealed, Socialite plunges to death with baby from penthouse, Viewers say Netflix went too far in graphic series, Johnson & Johnson COVID vaccine generates immune response, Dip-coin: Watchdog warns traders could ‘lose all their money’ after Bitcoin plummet, Pfizer, CDC probing death of doctor who took COVID vaccine, Bethenny Frankel made $7,250 on her first season of ‘RHONY’, ‘Saved by the Bell’ star Dustin Diamond confirms cancer battle, Bindi Irwin recreates pregnancy photo from parents Steve and Terri, © 2021 NYP Holdings, Inc. 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AMD shares closed more than 4% lower on Tuesday at $78.88. Copyright © 2021 InvestorPlace Media, LLC. The deal was going to be valued at $35 billion, so the net effective reduction in P/E ratios would be lower. As long as they love AMD, I think you can see the stock continue to move up. 1,307, This story has been shared 732 times. AMD will acquire Xilinx for $35 billion. 1125 N. Charles St, Baltimore, MD 21201. Also known as machine learning, many large companies are already employing this technology. 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. Advanced Micro Devices (NASDAQ: AMD) agreed to buy Xilinx for $35 billion in stock. At Thursday's close, the company had a … Advanced Micro Devices (AMD) - Get Report agreed to buy rival Xilinx (XLNX) - Get Report for $35 billion in stock. All rights reserved. Do Not Sell My Personal Information, Your California Privacy Rights It's still looking to complete its announced deal to buy Xilinx (NASDAQ:XLNX). The deal is now official after rumors began swirling earlier this … 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 stock … Chipmaker AMD also reported … 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 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 … 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. 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. Xilinx’s stock, which previously soared on … On Dec. 18, Barron’s reported that a Wells Fargo analyst, Aaron Rakers, recommended four semiconductor companies, one of which was AMD stock. 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. That’s not good news for AMD, Nvidia, Intel, Arm or Xilinx. AMD Stock Falls, While Xilinx Stock Surges. “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. 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