Why AMD Stock Popped Today

What happened

Shares of Advanced Micro Devices (NASDAQ: AMD) jumped 6.6% on Thursday after the semiconductor leader said it had completed its $1.9 billion purchase of Pensando Systems.

So what

AMD plans to integrate Pensando’s distributed services platform into its data center lineup. Pensando’s data processing units (DPUs) and software are used by cloud computing heavyweights such as Microsoft (NASDAQ: MSFT), IBM, and Oracle.

“Pensando’s leadership DPU complements our data center product portfolio, enabling AMD to offer solutions that can significantly accelerate data transfer speeds while providing additional levels of security and analytics that will play a larger role in defining the performance of next-generation data centers,” CEO Lisa Su said in a press release.

Computer servers are operating inside a data center.

Image source: Getty Images.

Now what

Microsoft is a particularly important partner. The tech titan’s Azure platform is second only to Amazon Web Services in the massive and rapidly expanding cloud infrastructure market.

AMD has been working to strengthen its ties to Microsoft. The chipmaker said on Thursday that Microsoft was adopting its Instinct MI200 accelerators to run large-scale artificial intelligence training processes. The companies also plan to work together to better support developers using this advanced technology.

“AMD Instinct MI200 accelerators provide customers with cutting-edge AI and HPC [high-performance computing] performance and will power many of the world’s fastest supercomputer systems that push the boundaries of science,” said AMD executive Brad McCredie.

Judging by its stock price gains on Thursday, investors are excited about AMD’s advances in the data center arena and its budding partnership with Microsoft.

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