Advanced Micro Devices, Inc. (NASDAQ: AMD) shares jumped 6.6 percent on Wednesday morning after the company launched its EPYC 7000 series server processors. The launch marks AMD’s return to the server business, and EPYC could provide boost to the company’s revenue growth and gross margins, according to Wells Fargo analyst David Wong.
At AMD’s launch event on Tuesday, the company announced nine EPYC 7000 processors with up to 2-socket configurations. Single and dual socket systems make up more than 90 percent of the server market, a market on which rival Intel Corporation (NASDAQ: INTC) currently has a firm grip.
Intel has its own highly-anticipated product launch event scheduled for July 11, when it is expected to reveal its next generation Purley server platform. The Purley Xeon server CPU platform is based on Intel’s Skylake processor architecture and is expected to trigger an enterprise refresh cycle.
However, it seems Intel investors see EPYC as a real threat, as Intel shares sank 1.7 percent on Wednesday morning.
At AMD’s launch event, Microsoft Corporation (NASDAQ: MSFT) and Baidu Inc (ADR) (NASDAQ: BIDU) both announced intentions to integrate EPYC into their systems. Hewlett Packard Enterprise Co (NYSE: HPE) also announced it will be including EPYC in some of its systems starting with Cloudline CL3150 later this year. In addition, Asus, Gigabyte, Inventec, Lenovo, Supermicro, Tyan and Wistron are all currently working on integrating EPYC into their systems as well.
“We believe this new server processor family will enable AMD to re-engage the x86 server processor market, helping revenue growth and gross margin,” Wong wrote.
Wells Fargo maintains an Outperform rating and $15 price target for AMD stock.
Latest Ratings for AMD
|Jun 2017||Longbow Research||Initiates Coverage On||Neutral|
|May 2017||Loop Capital||Downgrades||Buy||Hold|