AMD (AMD) Takeover by Microsoft (MSFT) Makes Some Sense But Seen as Unlikely - Piper Jaffray

Piper Jaffray analyst Katherine Egbert weighed in on recent rumors Microsoft (NASDAQ: MSFT) could takeover AMD (NYSE: AMD). While unlikely, a deal for AMD would make some strategic sense the analyst said.

"Although unlikely given the implications for Wintel, Microsoft buying AMD would be consistent with the recent beefing up of chip design talent by other large tech vendors," Egbert commented. "It would also provide protection and a clear path for Xbox development, an ARM architecture license and some data center technology."

The firm estimates that an all-cash purchase at a 20% premium would be $0.01 dilutive in CY16.

The firm reiterating an Overweight rating and price target of $53 on MSFT.

For an analyst ratings summary and ratings history on Microsoft click here. For more ratings news on Microsoft click here.

Shares of Microsoft closed at $43.04 yesterday.

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