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AMD spikes after Amazon makes a big bet on its new processors (AMD, AMZN)

Shares of AMD are rallying on Tuesday, up 7%, after Amazon made a partnership with AMD's new line of processors.

  • AMD held a "Next Horizon" event on Tuesday, unveiling its 7-nanometer graphics products and microprocessors.
  • During the event, AMD said
  • That will give some Amazon Web Service customers lower prices for their cloud services.

AMD was rallying on Tuesday, up 7%, after Amazon said it would use AMD's new line of processors for its cloud business.

graphics products and microprocessors, and said was partnering with new general purpose (M5 and T3) and memory-optimized (R5) instance types with AMD EPYC processors that are 10% less expensive than the current M5, T3, and R5 instances.

Simply put, the agreement will give some customers lower prices for their Amazon cloud services.

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While Amazon showed confidence in AMD's new 7nm data-center products, Morgan Stanley analyst Joseph Moore was bearish about the new lineup ahead of the event.

"Based partly on feedback from AMD, we wanted to be clear that EPYC 2 will not be shipping for revenue until next year (which has been our expectation), and calling this a product launch is probably an overstatement," Moore said. He has a sell rating and price target of $17 for AMD — 15% below where shares were trading.

AMD was up 94% this year.

  • AMD has tumbled into a bear market — here's why analysts say it's time to buy
  • AMD is getting smoked after revenue misses, guidance falls short
  • AMD's stock price reflects a 'scenario we don't believe possible,' analyst says

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