Advanced Micro Devices (AMD) has completed its $4.9 billion acquisition of ZT Systems, a hyperscale server maker. The deal combines AMD’s advanced processors, graphics chips, and networking technology with ZT Systems’ skills in building large-scale server systems and AI infrastructure.
With this integration, AMD can deliver end-to-end AI solutions optimized for hyperscale providers and enterprises. Also, the deal allows AMD to reduce the time needed to design and deploy cluster-level AI systems, boosting its position in the rapidly evolving AI market.
It must be noted that ZT Systems designs and deploys servers for major cloud providers like Amazon (AMZN) Web Services and Microsoft (MSFT) Azure. This helps AMD strengthen its position in the data center market.
The newly acquired ZT Systems will operate under AMD’s Data Center Solutions business unit, led by Executive Vice President Forrest Norrod.
Importantly, AMD anticipates the deal to be accretive on an adjusted basis by the end of 2025.
AMD’s AI Push
This deal reflects one of the company’s efforts to strengthen its presence in the AI space through several initiatives. Among others, AMD has launched cutting-edge products like the 5th Gen EPYC processors and Instinct MI325X accelerators, which can handle high AI workloads efficiently.
Also, the company is developing AI-powered PCs with its Ryzen AI PRO processors to boost performance for both businesses and everyday users.
Overall, these efforts help bolster AMD’s position in the fast-growing AI market.
Is AMD a Good Stock to Buy Now?
Turning to Wall Street, AMD stock has a Moderate Buy consensus rating based on 24 Buys, 12 Holds, and one Sell assigned in the last three months. At $147.34, the average AMD stock price target implies a 43.41% upside potential.
