In news that might hurt Cisco ( NASDAQ: CSCO ) and Hewlett Packard ( NYSE: HPQ ). Reported by CNBC around lunch today, Verizon ( NYSE: VZ ) will be buying technology from Advanced Micro Devices, Inc ( NYSE: AMD ) directly and will try to compete with Amazon’s cloud service.
Amd ‘s new approach has been to compete less with Intel on a performance basis, and to go after custom direct solutions. Working with buyers to create exactly what they need in a hope to lower cost and raise reward to each party. This announcement runs parallel with that strategy. Once thought to be a potential bankruptcy case, AMD is showing that 2014 might be a good year.
With the console market solely in AMD’s camp, it will be curious to see what other industries AMD can break into.
It is speculated that At&t might be in the mix eventually as well, however no news has been reported at this time.
A big player like Verizon moving from more of a traditional server market to more of a cloud based market is poised to make noise in the markets as well in the industry itself. If Verizon does indeed try to compete in the market dominated currently by Amazon, it will be an interesting watch. It has been speculated that this is a move Verizon might be considering for awhile.
It is curious that AMD itself has not yet announced this news. The company might be trying to wait until releasing earnings information to drop the news in a hope to gain a positive outlook going forward. Right now institutional ownership of AMD is fairly low. (Currently hovering around 50%)