AMD's latest chip reveal is 'one of the biggest turning points in the history of Silicon Valley,' one analyst says
- AMD revealed its latest data-center chip - named EPYC 2 - on Wednesday.
- A Rosenblatt analyst is already saying the product "may prove to be one of the biggest turning points in the history of Silicon Valley."
- The chip giant traded as much as 15% higher Thursday on the news. Google, Amazon, Twitter, and Microsoft all announced plans to either switch to the chip or increase their planned orders.
- The analyst noted the competing product from Intel doesn't measure up to the AMD version's performance, saying the offering will "destroy" Intel's chip.
- Watch AMD trade live here.
AMD unveiled its latest server chip - called EPYC 2 - on Wednesday, and one Wall Street analyst is already calling the reveal "a history-changing event."
The chipmaker traded as much as 15% higher Thursday after unveiling the new chip. Google said it would serve as the chip's top customer for both its own data center use and Google Cloud business.
Microsoft, Amazon, Hewlett Packard Enterprise, Dell, and Twitter all announced they will also switch to the Epyc 2 chip or increase their current order count.
The EPYC Horizon event - where the chip was announced - served as the "culmination of five years of determined focus, effort, and huge bets," Hans Mosesmann, an analyst at Rosenblatt Securities, said in a client note on Thursday.
Mosesmann thinks the EPYC 2 chip offers "better-than-expected gen-to-gen performance" and says the reveal "may prove to be one of the biggest turning points in the history of Silicon Valley," according to the report.
He continued: "AMD's intentions are to own the data center. All of it."
Rosenblatt also compared AMD's new offering to the alternative from rival Intel. Though the new Intel Cascade Lake chip may take the crown for fastest clock speed, Mosesmann noted the metric is less relevant for data center usage, stating that AMD's chip offers 2.5-to-4 times the performance value.
"From a market segmentation perspective, AMD's single socket offerings will destroy (we had been using disrupt in the past) Intel's 2-socket offerings," Mosesmann said.
The announcement comes one day after AMD CEO Lisa Su denied a rumor she was mulling an exit from the company to work for IBM. She wrote on Twitter there was "zero truth" to the speculation," and hinted at Wednesday's big reveal by adding "I love AMD and the best is yet to come."
Rosenblatt rates AMD shares as "buy," with a price target of $42 per share. The stock is now up roughly 80% year-to-date.
AMD has 13 "buy" ratings, 19 "hold" ratings, and five "sell" ratings from analysts, with a consensus price target of $31.59 per share, according to Bloomberg data.
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