Chipmaker Advanced Micro Devices is broadening its data center capabilities with a planned $1.9 billion acquisition of distributed computing startup Pensando. AMD stock rose on Monday.
Santa Clara, Calif.-based AMD announced early Monday that it is buying Milpitas, Calif.-based Pensando. The two companies expect the deal to close in the second quarter.
Founded in 2017, Pensando makes products that accelerate networking, security, storage and other services for cloud, enterprise and edge applications.
Pensando's high-performance processor and software stack already is deployed at scale with leading cloud and enterprise customers. Those customers include Goldman Sachs, Hewlett Packard Enterprise, IBM, Microsoft and Oracle.
AMD Stock Rises
On the stock market today, AMD stock rose 2.2% to close at 110.53.
"To build a leading-edge data center with the best performance, security, flexibility and lowest total cost of ownership requires a wide range of compute engines," AMD Chief Executive Lisa Su said in a news release.
The acquisition of Pensando will add a leading distributed services platform to AMD's portfolio of central processing units, graphics processing units and other chips, Su said.
AMD's purchase of Pensando looks expensive by traditional metrics but is still a positive move, Wedbush Securities analyst Matt Bryson said in a note to clients. He said Pensando will fit well with AMD's current positioning in the data center, especially after its acquisition of Xilinx.
Bryson reiterated his outperform rating on AMD stock with a price target of 165.
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