AMD stock surges as Amazon starts using Epyc chips in the cloud

Shares of Advanced Micro Devices Inc. jumped on Tuesday after the chip maker announced that its Epyc central processing units would be adopted by Amazon Web Services, the largest public cloud provider in the world.

AMD

AMD + 4.05%

Stocks climbed to an intra-day high of $ 21.65 before posting gains of about 4.5% on Tuesday afternoon. Amazon.com Inc.

AMZN, + 0.82%

shares rose 0.4%, and the S & P 500 index

SPX, + 0.56%

was up 0.2%.

Tuesday's rise in AMD shares coincided with the announcement that AWS 'Elastic Compute Cloud, or EC2, is now using AMD's Epyc datacenter chips. When AMD launched the Epyc server chips in June 2017, the chip maker's shares grew 24% over the week.

"The availability of multiple instances powered by an AMD Epyc processor on Amazon EC2 instances marks an important step in the increasing adoption of our high-performance processors with cloud service providers," said Forrest Norrod, AMD's general manager for data centers and integrated solutions, in a statement. declaration.

Amazon said that using Epyc chips would reduce costs because they are 10% less expensive than the current chips that they use.

"In addition to adding to what is already the largest and most powerful computing services package available in the cloud, these new AMD-based instances offer customers an even more cost-effective way to access the cloud." "Run most of the most common applications," Matt Garman, AWS vice president of computer services, said in a statement.

The costs caught the attention of analyst Patrick Moorhead at the chip maker event in San Francisco on Tuesday.

"The world's largest cloud provider, Epyc, is the most important news of the day," said Moorhead in an email. "It's a testament to Epyc's abilities. I was impressed by the fact that AWS stated that this did not require any software or script changes, and yet a 10% cost reduction. "

Do not miss: why AMD thinks it can challenge Intel in servers

He added, however, that Intel Corp.

INTC, -0.74%

is likely to provide the "lion's share" of semiconductors for AWS cloud servers. AMD is trying to fight the leader of Intel data center chips as well as Nvidia Corp.

NVDA, + 0.08%

, which has built a major business providing graphics processing units for servers.

In October, AMD and Oracle Corp.

ORCL, + 0.44%

said the Oracle cloud service would use Epyc chips in order to offer lower cloud prices to its customers. In addition, in December, Microsoft Corp.

MSFT, + 0.10%

Azure has become the first public cloud provider to start using Epyc chips in their data centers.

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