Advanced Micro Devices Inc. shares jumped Tuesday after the chipmaker announced that its Epyc central processing units were to be adopted by the world's largest public launcher, Amazon Web Services.
AMD, + 3.97%
shares increased to an intraday high of $ 21.65 before cooling for gains of approx. 4.5% Tuesday afternoon. Amazon.com Inc.
AMZN, + 0.93%
shares were up 0.4% and the S & P 500 Index
SPX, + 0.63%
was up 0.2%.
Tuesday's rally in AMD shares coincided with the announcement that AWS's elastic computational clouds, or EC2, now use AMD's Epyc data center chips. When AMD launched the Epyc Server chips in June 201
"The availability of several AMD Epyc processor-driven instances on Amazon EC2 instances marks a significant milestone in the growing adoption of our high performance CPUs with corporation providers." Forrest Norrod, AMD's head of data center and embedded solutions, said in a statement.
Amazon said using Epyc chips will lower the cost as they are 10% cheaper than the current chips they use.
"Apart from adding what is already the widest and most possible set of computing services available in the cloud, these new AMD-based entities provide an even cheaper way to run many of the most common applications." Matt Garman, AWS Vice President of Compute Services, said in a statement.
The cost was analyst Patrick Moorhead's eye on the chip maker's San Francisco event on Tuesday.
"The world's largest ship supplier offering Epyc is the biggest news of the day," Moorhead said in an email. "This is a testament to Epyc's abilities. I was impressed when AWS said that no software or script changes needed but a 10% cost reduction."
Do not Miss: Why AMD believes it may challenge Intel in servers
He added, though, that Intel Corp.
is likely to provide "lion's share" of semiconductors for AWS cloud servers. AMD tries to fight data center chip Intel, as well as Nvidia Corp.
which has built a significant business that offers graphics processing devices for servers.
Back in October, AMD and Oracle Corp.
ORCL, + 0.47%
said that Oracle's ski service would use Epyc chips as a means to offer lower prices to customers. Also in December, Microsoft Corp. s
MSFT, + 0.20%
Azure became the first public cloud provider to start using Epyc chips in its data centers.
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