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Cramer reacts to AMD-Xilinx tie-up: ‘I think the stock’s a steal’


CNBC’s Jim Cramer pounded the desk on Advanced Micro Devices after shares dropped off Tuesday.

“I think AMD still has a ton of upside. You’re effectively getting today’s incredible, magnificent quarter for free,” the “Mad Money” host stated. “At these levels, I think the stock’s a steal.”

The feedback got here after the inventory tumbled 4%, regardless of the semiconductor maker reporting massive top- and bottom-line beats in its third-quarter report that morning.

AMD posted income of $2.80 billion, up virtually 56% from a 12 months in the past, and internet earnings of $390 million, greater than thrice what it reported in the identical quarter in 2019.

The inventory value declined after the firm, in turning up its competitors with Intel in the knowledge heart chip market, stated it might pay out $35 billion for Xilinx, an adaptive processing platform maker, in an all-stock deal. Xilinx shares surged greater than 8% to shut at $124.35 Tuesday.

“These are guys who are selling AMD and buying Xilinx to take advantage of the gap between where Xilinx is trading and what AMD’s willing to pay, and one day it closes,” Cramer stated. “Others dumped AMD because they don’t want to wait a year-and-a-half for this deal to close, as the company seeks approval from regulators all over the world, including China. Still others I think, though, doubted [CEO Lisa] Su’s leadership.”

AMD stated earlier this 12 months that knowledge heart gross sales may account for 30% of its enterprise in the subsequent three years. The knowledge heart made up 15% of gross sales final 12 months.

“Lisa Su’s trying to build a semiconductor titan with aspirations well beyond the PC, gaming and the datacenter,” he stated. “I say bank with her and be grateful that you can go along for the ride.”

Disclosure: Cramer’s charitable belief owns shares of Advanced Micro Devices.

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