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AMD Stock: Advanced Micro Devices Takes a Jab at Nvidia with New Purchase

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Advanced Micro Devices (NASDAQ:AMD) made an announcement today that appears to be catapulting the company further into the AI discussion. Specifically, the semiconductor maker announced it has agreed to buy Silo AI for $665 million, accelerating its vision to create new software and services to complement its AI chips and hardware.

Experts see this push as a direct affront to industry leader Nvidia (NASDAQ:NVDA), which has dominated the high-performance semiconductor space in recent years. Through Silo AI, Advanced Micro Devices will get access to individuals with robust AI skillsets and experience delivering AI solutions to top-tier customers. Investors clearly like this, sending shares of AMD stock nearly 3% higher in early afternoon trading.

AMD Stock Surges on AI Acquisition Announcement

Nvidia’s market share lead remains robust. But among the key competitors looking to carve out a growing client base in this space is AMD.

The company’s announced acquisition of Silo AI should help AMD to challenge Nvidia on the innovation front. In order for there to be meaningful long-term upside for end users, this competition should be healthy and encouraged. In many regards, it could make both players better over the long run (and perhaps that’s the silver lining for Nvidia investors). It is worth noting that both stocks are higher today.

Ultimately, I think this announcement is worth considering from the standpoint of AMD’s commitment to continuing to invest heavily in its AI chips. This is more of a statement to investors than something that will move the needle in the near term. For now, investors seem to be happy with this demonstration of intent and the potential for Silo AI to take AMD to the next level.

On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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