A report from Kitguru suggests that Microsoft may be eyeing struggling chipmaker AMD as a potential acquisition. It appears that Microsoft initiated the talks several months ago, claimed the source.
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However, Knocking out a billion per year for the next ten years of home consoles by owning AMD would make this nearly a free acquisition. In the meanwhile, another of AMD’s peer, and competitive player, Nvidia Corporation (NASDAQ:NVDA) remained on-course at the stock market, without major slides or gains.
AMD is already a key partner for Microsoft’s Xbox One console, providing the chips that power the hardware.
As for as concerns shares volumes, in share capital Advanced Micro Devices, Inc. It was noted however that a deal could be within Microsoft’s reach, given the $1.81bn value of AMD and Microsoft’s excess of cash to spend.
“We rate ADVANCED MICRO DEVICES (AMD) a SELL”. If Microsoft does not end up buying AMD, then Qualcomm might another likely candidate.
Three sources familiar with the matter told Reuters that AMD is at the initial stage of reviewing, and has asked a consulting firm about its options in trying to turn the company around.
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It was only last week that another rumour surfaced about AMD looking to spin off its GPU business unit, the one formed after the acquisition of ATI. A similar move from Samsung or even Sony would start a complete chaos with smaller companies and even larger ones like Apple that depend on companies like AMD to provide excellent products with enough profit to build a solid brand. Once that rumor fell through, the next company in line had to be Microsoft. The situation is quite interesting, and could force Sony to choose another processor maker for its next console. “The company’s weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, generally high debt management risk, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share”.
