Street View: AMD's acquisition of ZT Systems to help close gap with Nvidia
** AMD AMD.O said on Monday it plans to acquire server maker ZT Systems for $4.9 billion as the company seeks to expand its portfolio of AI chips and hardware and battle Nvidia NVDA.O
** Shares of AMD up 1.5% to $157.73 premarket
POSITIONS AMD TO BETTER COMPETE FOR AI SYSTEMS
** Piper Sandler ("overweight," PT: $175) says AMD filled a major gap in its AI system level offering with the acquisition of ZT Systems; adds ZT's capabilities would allow AMD to deliver the AI systems faster to customers
** J.P. Morgan ("neutral," PT: $180) says the deal is a step in the right direction for AMD and should help close the gap with NVDA over the next few years
** Evercore ISI ("outperform," PT: $193) says it likes the deal as it positions AMD to better compete for orders of large-scale AI systems at hyperscalers
** Brokerage says the divestiture of ZT's manufacturing operations could result in AMD recouping a large part of its investment
** TD Cowen ("buy," PT: $210) says AMD has acquired another tool to drive AI platform revenue and sees it well on its way to be the de facto alternative to NVDA
** Brokerage adds that AMD retaining 1,000 engineers of ZT and intention to divest the manufacturing business shows it is acquiring talent and not revenue
Reporting by Gokul Pisharody in Bengaluru
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