AMD shares lifted as $4.9bn ZT acquisition promises accelerated AI scale-up

AMD (NASDAQ:AMD) shares traded higher on Monday, moving up to $152.72, after announcing the acquisition of server maker ZT Systems for $4.9 billion.

The deal is described as part of AMD’s strategy to expand its portfolio of artificial intelligence (AI) chips and hardware, to compete more effectively with Nvidia.

The deal will be funded through a mix of cash and stock (75% cash and 25% stock).

ZT Systems, a privately held company based in New Jersey, has approximately 2,500 employees and AMD is expected to retain about 1,000 of the engineers to bolster its expertise in AI system design and deployment.

Post-completion, meanwhile, AMD is expected to sell ZT’s server manufacturing business.

Lisa Su, AMD chief executive, emphasised that AI systems are the company's top strategic priority. Monday’s deal is expected to accelerate the testing and rollout of AMD’s AI GPUs.

It is also expected to enhance AMD's ability to deliver end-to-end AI infrastructure to its customers.

ZT Systems currently generates approximately $10 billion in annual revenue, primarily from its manufacturing unit. And, AMD said it expects the acquisition to contribute positively to its adjusted financial performance by the end of 2025.

In New York, AMD shares gained $4.30 or 2.9% changing hands at $152.86.