AMD’s acquisition spree since 2017: Pensando and Xilinx added to the portfolio

Advanced Micro Devices (AMD) is a company with a considerable portfolio. They are one of the primary manufacturers of computer processors and related technologies for customers worldwide. From individual customers to small- and large-scale businesses, all benefit from the products AMD offers. A recent acquisition is made on behalf of improvement upon which we will dig down and see what’s changing in the ecosystem.

AMD recently lost 8 per cent of its total market capitalisation, which roughly makes up about $16 billion, due to Barclays, an investment bank downgrading its stock to Equal-weight. Even within the dilemma, the company announced its acquisition of networking vendor Pensando for $1.9 billion.

The market capitalisation of AMD is $168.85 billion, which fell a significant margin due to the common issues going on in the cabalist market. But the acquisition spree is continuous, and it’s surprising the company picked a time when its stock prices are down, seeping billions from its cap.

Pensando, CTO and co-founder Vipin Jain gave great insight on the purchase. He said AMD aspires to be the “Nvidia” infrastructure with the building of a networking component drilled inside the CPU. It can be called SmartNIC/DPU/IPU. We heard of docker based Kubernetes; the work ethic is similar but on a broader scale. Processors with in-built networking architecture will process high speed and low-cost cloud computing. It is excellent news for all techie consumers as the improvement may change how our interaction with computing and network works.

AMD has already confirmed the acquisition and partnered with Goldman Sachs, IBM, Azure, Oracle Cloud, and IBM Cloud. Customers of those platforms would be the first wave of beneficiaries. If those architectural results are prominent, their experiences should elevate. A briefing from Azure cloud’s corporate VP Girish Bablani said they are spectating a “40x improvement in overall cloud-based connection related performance.”

Pensando CEO said that he was excited to be a part of AMD. The company will serve as AMD’s Data Centre Solutions Group. GM Forrest Norrod, AMD’s senior VP, will lead this business side. Pendsando’s silicon designs are pretty renowned. AMD is also purchasing Xilinx, so they are excited to partner with the silicon designer. SmartNIC/DPU/IPU’s future seems pretty bright as the acquisition will empower them greatly.

AMD CPU’s primary competition is Intel, and the graphics chip competition is Nvidia. Both are large companies and the best in business. AMD’s rivalry with top tech product manufacturers indeed speculated ahead. A few years back, we could see a lower price on AMD stocks as they were stuck on the old framework. With Lisa Su, current CEO of AMD, in power, motives started to change. The company was putting up with Nvidia fiercely and has become a household name for high-performance computing. But they will not stop there. The Pensando and Xilinx acquisition will empower SmartNIC chips to serve data centres. Before the manufacturing and next-generation product reveals began, the company partnered with big names in the cloud industry. Partnering with AWS would’ve been another significant milestone, but they have other things in mind.

On the other hand, investors and brokers ask questions as they are as confused as the newcomers that they should buy the shares while they are low. The company is not trading as well as Nvidia (NVDA) but is still keeping up as a household name. The company gained over 31 per cent in sales yearly, providing a considerable market quota for investors. Blayne Curtis, a Barclays analyst, said, “we see critical risk across several end markets (PC, Gaming, and broad-based/XLNX).”

Within the next three months, we expect the acquisition to be complete. After the acquisition period, it will take a few months for the companies to settle in. AMD should again bring in the big guns against Intel with their SmartNIC/IPU/DPU hardware.