AMD's CEO was at Google's big streaming video-game unveiling, and it may hint big plans for the future

AMD

AMD CEO Lisa Su

• AMD's graphics processing unit was chosen to run Google's new streaming-video-game platform.
• The presence of AMD CEO Lisa Su at Tuesday's developer's conference could be a sign the two companies will work more closely in the future.
• Watch AMD trade live.

AMD was the biggest winner on Tuesday, spiking 12%, after Google unveiled Stadia, its plan to upend the video-game industry.

At its developer's conference on Tuesday, Google formally announced that it would use AMD's graphics processing units for its new cloud-based gaming platform "Stadia." The new streaming platform will allow gamers to play anywhere they can access the Chrome web browser.

And while Tuesday's announcement that Google would use AMD GPUs for Stadia was already known, Jefferies analyst Mark Lapacis said just the formal announcement of the partnership was enough to support the stock.

More importantly, however, he thinks the attendance of AMD CEO Lisa Su at Tuesday's event signals the two companies could work even more closely in the future.

He says the "conspicuous absence of Intel from the announcement, suggests a close relationship between AMD and Google, and the increasing likelihood that Google will ultimately announce that it will use AMD EPYC 2 server MPUs."

A deal between Google and AMD on servers would be more important that the GPU announcement for gaming because it represents a $25 billion a year market, according to Lapacis. He says the consensus only sees AMD grabbing 10% of that market over the next 12 to 24 months.

As for Tuesday's 12% spike, which catapulted shares to their best level since October, Ihor Dusaniwsky, managing director of predictive analytics at the financial technology and analytics firm S3 Partners, says the move looked like "a FOMO rally with buyers looking to get in before they miss the early and chunky profits."

He noted that the sell-off in shares of video-game console makers Nintendo and Sony, which both lost more than 4.5%, suggests that chipmakers, and particularly AMD, "may be one of the big winners in this technology."

AMD was up 41% this year through Tuesday.

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