Why AMD 's stock price has jumped 6% today

Trying to take advantage of its rival Intel, Advanced Micro Devices Tuesday announced new chips that will be available in the coming years and an agreement to provide Amazon with microprocessors for its cloud servers.

The news sent AMD shares up 6% in midday transactions.

The new chips mark an improvement in the multi-year plan of CEO Lisa Su, aiming to focus on the best performing chips instead of cheaper imitations of competing products. And they should give the company a solid base to attack Intel's near 99% market share in enterprise and cloud data center chips.

AMD has unveiled a new series of graphics processing chips, which can also be used for many machine learning systems and A.I. computer tasks, called Radeon Instinct MI60 and MI50. These are the first data center graphics chips that use the semiconductor industry's new process to package more circuits on a chip, at a scale of 7 nanometers, which should make them more efficient and faster.

And starting today, Amazon offers businesses the ability to run some of their cloud computing applications on servers using AMD's Epyc chip. Businesses that do this would reduce the rental costs of Amazon's computing power by about 10 percent compared to using servers running concurrent processors, AMD said.

If this option proves popular with Amazon customers, it could lead to a significant sales gain for AMD. The company has already announced chip supply contracts with most other major cloud providers, including Microsoft and Baidu.

AMD also introduced a new version of the Epyc chip for next year, under the code name "Rome," also at the 7-nanometer scale.

This news helped drive up AMD's share price, which led investors into a wild ride, up to $ 21.65 on Tuesday. The price had soared to 34 dollars in mid-September, while AMD was excited to gain more market share from Intel. But the stock then dropped nearly $ 16 last week, after AMD's results showed the gains had not been realized as fast as some investors had hoped.

Tuesday, Intel's share price fell 1%, while that of Nvidia (nvda), AMD's main competitor in the graphics chip market, also fell 1%.

AMD (amd) does not manufacture the chips it designs, but relies on others, such as Taiwan Semiconductor (tsm) and GlobalFoundries. Recently, Taiwan Semiconductor has improved its production to print circuits on chips at a scale of 7 nanometers (although the measurement is rather a shortcut and does not indicate the actual size of circuits on chips).

This move helped AMD and other Taiwan Semiconductor users, including Apple, to offer chips that are more competitive with Intel chips in terms of price and performance.

Intel (intc) designs and manufactures its own chips. And the company has been stuck for years at a scale of 14 nanometers. Recently, Intel announced that it would not produce high-volume chips at a 10-nanometer scale before the end of next year, four years later than expected.