Citi keeps a Neutral rating on AMD (AMD) after the company announced it will divest the manufacturing business of ZT Systems to Sanmina (SANM) for $3.0B. Last August, AMD announced it would acquire ZT Systems for $4.6B but would sell off the manufacturing piece and retain the engineers to better compete with Nvidia (NVDA), the analyst tells investors in a research note. Citi previously expected AMD to sell this for around $5.0B. The ZT Systems acquisition should allow AMD to better compete with Nvidia in the data center GPU market via additional system experience and faster hyperscaler deployment times, contends the firm.
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