Advanced Micro Devices Completes Xilinx Acquisition

Advanced Micro Devices (AMD) has completed the acquisition of Xilinx in an all-stock transaction. According to Reuters, the $50 billion deal is a record for the chip industry and is expected to give the company an edge in the data center market.

Advanced Micro Devices is a semiconductor company that produces chips used in desktops, notebooks, and data centers. It also produces graphics processing units.

Xilinx Acquisition

Xilinx joins AMD with an extensive product line, customers, and talent to create the industry’s high-performance and adaptive computing leader. The acquisition should enhance the company’s footprint in key markets like data centers where Xilinx is a big player, as well as in the 5G communications, industrial, and defense markets.

Following the acquisition, Xilinx CEO Victor Peng will become president of the newly formed Adaptive and Embedded Computing Group (AECG). The new unit will focus on driving leadership FPGA, Adaptive SoC, and software roadmaps. The unit will pursue a larger share of the $135 billion market opportunity across cloud, edge, and intelligent devices.

Xilinx Shareholders will receive 1.7234 shares of AMD stock and cash for any fractional shares of AMD for each Xilinx share held. Xilinx shares will cease trading on the NASDAQ index.

Analysts’ Take

Wells Fargo analyst Aaron Rakers recently reiterated a Buy rating on Advanced Micro Devices stock with a price target of $180. Rakers’ price target suggests 57.52% upside potential.

Consensus among analysts is a Moderate Buy based on 14 Buys and 9 Holds. The average Advanced Micro Devices price target of $156.95 implies 37.35% upside potential to current levels.

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