If AI infrastructure demand is slowing, as some market watchers claim, AMD (AMD) CEO Lisa Su isn’t seeing it.
“The need for compute continues to be immense,” Su told me in a Yahoo Finance exclusive interview on Monday. “We see that throughout all of our customers globally, and we’re going to continue to invest strongly in this area because I think this is the single most important technology. I like to say it’s the single most important technology of the last 50 years.”
Su is backing up her views with cold, hard cash.
AMD announced today it closed on its $4.9 billion acquisition of ZT Systems. Announced in August 2024, the deal is expected to bolster AMD’s presence in compute infrastructure for hyperscalers. ZT Systems counts Microsoft (MSFT) as a key customer, as does AMD.
The company anticipates the transaction to be accretive to non-GAAP results by the end of 2025. The company is “actively engaged” with strategic partners to purchase ZT Systems’ US-based data center infrastructure manufacturing business in 2025.
As of 11:52:42 AM EDT. Market Open.
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Su said a decision on the manufacturing business will be shared in “coming months.”
Added Su, “I want to be really clear about this. There is no question we are in the very early innings of AI now — to put some of the noise aside. We continue to see more applications, more capability. Enterprises are just at the very early innings of adoption. And frankly, they need more help from folks like ourselves.”
AMD’s stock continues to be held back amid the broader sell-off in momentum tech names such as rival Nvidia (NVDA). Shares are down 15% year to date, underperforming the S&P 500’s 5% drop.
The company’s first quarter guidance left some on the Street uneasy too.
AMD said in early February first quarter sales would be down 7% sequentially. Data center and PC chip sales are seen lower.
“Although AMD has improved its competitiveness across CPU and GPU products with Ryzen, EPYC, and Radeon platforms and is on track to improve its market share and drive meaningful revenue growth in the near term, we believe long-term share gains are less certain,” said JPMorgan analyst Harlan Sur in a note to clients. “In addition, AMD will have to invest heavily in operating expense (especially R&D) in order to keep pace with the market leaders.”
Sur reiterated a Neutral rating on AMD’s stock.
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected].
