Advanced Micro Devices (AMD) and Intel are US-based chip manufacturers that have long been competitors in the global processor (CPU) market. Intel has dominated the global CPU market for several years, so it seems to be a bigger company than AMD in terms of market cap.
But in February 2022, everything changed. AMD surpassed Intel’s market cap for the first time in history. This was facilitated by AMD’s recent acquisition of chip maker Xilinx. According to TomsHardware, on Tuesday (February 15, 2022) on the Nasdaq, AMD’s market cap was $197.7 billion. According to the same report while at Intel, it has a market cap of $197.2 billion.
The difference is small, but AMD still has a larger market cap than Intel. This performance surpassed Intel for the first time in terms of market cap that AMD achieved in the global processor market in 52 years.
However, according to the Google Finance website, on Thursday morning (February 17, 2022), AMD’s market capitalization is rising, and the gap between the market capitalization and Intel’s is widening. At the close of the trading session on Wednesday (February 16, 2022), the Ryzen series processor manufacturer had a market cap of $197.68 billion. Competitor Intel, meanwhile, has a smaller market cap of $196.3 billion.
The impact of Xilinx acquisition
According to TomsHardware, AMD’s performance is a positive response to the company’s move to acquire Xilinx, a maker of field programmable gate array (FPGA) chips. AMD’s acquisition of Xilinx is said to be worth $49 billion. This figure is said to be the largest acquisition in the history of a semiconductor company.
AMD’s acquisition of Xilinx converted 249.38 million shares of Xilinx to 428 million new AMD shares. Combining AMD stocks already traded on the market, the total number of AMD stocks is 1.628 billion. AMD’s own stock closed on the exchange on Wednesday (February 15, 2022) at around $121. Multiplying the 1.628 billion AMD stock by the price of $121 gives AMD’s market cap to be accurate and gives us $19,768 billion.
In these cases, there is the term “bullish”. The term refers to a situation when an investor is bullish or describes a market situation in which there is an uptrend or consolidation.
In general, the acquisition of Xilinx and the increase in AMD’s market cap; is said to be able to create a bullish market condition. Because investors in the market are optimistic about AMD’s future growth prospects, compared to Intel. According to TomsHardware, there are several reasons that make it bullish. For example, AMD’s recent acquisition of FPGA chipmaker Xilinx will bring a broad portfolio of different chip products; under the company’s umbrella.
It is believed that the acquisition of Xilinx and an increase in AMD’s market cap could create optimistic market conditions. As investors in the market are generally more optimistic about AMD’s future growth prospects compared to Intel. According to TomsHardware, there are several reasons that make it bullish. For example, AMD’s recent acquisition of FPGA chip maker Xilinx will expand the company’s diverse chip portfolio.