CNBC's Jim Cramer pounded the table on Advanced Micro Devices after shares dropped off Tuesday.
"I think AMD still has a ton of upside. You're effectively getting today's incredible, magnificent quarter for free," the "Mad Money" host said. "At these levels, I think the stock's a steal."
The comments came after the stock tumbled 4%, despite the semiconductor maker reporting big top- and bottom-line beats in its third-quarter report that morning.
AMD posted revenue of $2.80 billion, up almost 56% from a year ago, and net income of $390 million, more than three times what it reported in the same quarter in 2019.
The stock price declined after the company, in turning up its competition with Intel in the data center chip market, said it would pay out $35 billion for Xilinx, an adaptive processing platform maker, in an all-stock deal. Xilinx shares surged more than 8% to close at $124.35 Tuesday.
"These are guys who are selling AMD and buying Xilinx to take advantage of the gap between where Xilinx is trading and what AMD's willing to pay, and one day it closes," Cramer said. "Others dumped AMD because they don't want to wait a year-and-a-half for this deal to close, as the company seeks approval from regulators all over the world, including China. Still others I think, though, doubted [CEO Lisa] Su's leadership."
AMD said earlier this year that data center sales could account for 30% of its business in the next three years. The data center made up 15% of sales last year.
"Lisa Su's trying to build a semiconductor titan with aspirations well beyond the PC, gaming and the datacenter," he said. "I say bank with her and be grateful that you can go along for the ride."
Disclosure: Cramer's charitable trust owns shares of Advanced Micro Devices.
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October 28, 2020 at 06:45AM
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Cramer reacts to AMD-Xilinx tie-up: 'I think the stock's a steal' - CNBC
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