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Should Microsoft Try To Acquire AMD, Nvidia or Micron In 2021?

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

· 02/06/2021 11:28

Every week, Benzinga conducts a survey to collect sentiment on what traders are most excited about, interested in or thinking about as they manage and build their personal portfolios.

This week we posed the following question to over 1,000 traders and investors about Microsoft Corporation (NASDAQ:MSFT):

Over the next year, should Microsoft try to acquire AMD, Nvidia or Micron?

  • Advanced Micro Devices, Inc. (NASDAQ:AMD)

  • Nvidia Corporation (NASDAQ:NVDA

  • Micron Technology, Inc. (NASDAQ:MU)

  • Buy none

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. 

The company is organized into three main segments: productivity and business processes (Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server) and personal computing (Windows Client, Xbox, Bing search, display advertising, Surface laptops, tablets and desktops). 

At time of publication Microsoft’s market cap measures in at $1.83 trillion. For context, this figure exceeds the combined market caps of Nvidia ($336 billion), AMD ($106 billion) and Micron ($90 billion) three times over.

See Also: How To Buy Microsoft Stock.

Our survey found 32% percent of respondents saying Microsoft should move forward on an M&A with AMD in 2021.

AMD designs and produces microprocessors for the computer and consumer electronics industries. The majority of the firm's sales are in CPUs and graphics processing units.

Many traders and investors were vocal in their support of AMD, saying it has time and again proven itself with its processors and GPUs in the gaming industry. Respondents said AMD should be seriously considered as a top M&A contender with Microsoft, as the two tech companies have had several prior partnerships, including a recent Xbox Series X|S project which integrates full AMD RDNA 2 architecture.

Next, 28% of traders and investors responded that Microsoft should complete an M&A with Nvidia this year.

Nvidia is a leading designer of GPUs. The company’s chips are used in a variety of markets, including high-end PCs for gaming, in a GPU-accelerated AI shopping tool for Facebook, Inc. (NASDAQ: FB) and for autonomous driving tech in many Tesla Inc (NASDAQ: TSLA) electric vehicles.

Respondents in this group cited Nvidia as an essential developer and leader in future chipmaking that has made a name for itself in the auto and bio-intelligence industries. An Nvidia acquisition would immediately bolster Microsoft’s mobile computing units.

Only 6% of traders and investors saw a Microsoft-Micron M&A making sense during 2021.

Respondents said Microsoft should look to acquire Micron’s ultra-bandwidth solutions, which are known to deliver maximum bandwidth to feed client’s data-hungry workloads like high-performance computing, artificial intelligence systems and professional visualization workstations, as traders believe these fields will continue to spike in demand amid a transition to long-term remote working conditions. 

Finally, 30% said Microsoft should not acquire any of the three companies. 

It’s worth noting that several respondents who were opposed to these M&As believed the Redmond-based tech giant would be better served focusing on research, development of cloud-based tech and a possible M&A in the cloud sector.

This survey was conducted by Benzinga in February 2021 and included the responses of a diverse population of adults 18 or older.

Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from over 1000 adults.

Source Image: Wikimedia Commons by BenFranske