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AMD's EPYC Processors Selected by Lenovo For HCI Solution

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Advanced Micro Devices, Inc. (AMD - Free Report) recently announced that its EPYC processors were utilized by Lenovo Group Limited for its latest hyperconverged infrastructure (HCI) solution — ThinkAgile HX. It is a scalable HCI platform built in collaboration with VMware, Nutanix and Microsoft (MSFT - Free Report) .

Coronavirus-induced remote work trends have fuelled the need for modernized data center operations that can support the enterprises’ needs for enhanced security and agility. HCI environment enables system administrators to provide an efficient virtual desktop infrastructure (VDI) that supports remote work trends while capping costs.

The EPYC processors offer smooth running of virtual desktop workloads and sustain a steady performance with relatively lesser number of servers.

Also, these processors boast of a strong ecosystem assistance from leading Original Equipment Manufacturer (OEM) and Independent Software Vendor (ISV) affiliates.

In fact, EPYC processors are integrated with AMD Infinity Guard, which is a set of security attributes and ensures safety of data on the HCI environment.

AMD is riding on strong traction witnessed by its EPYC processors across virtualized and HCI architecture. This is expected to boost AMD’s revenues in the upcoming days and instill investors’ optimism in the company’s stock.

Notably, shares of AMD have returned 83.6% in the year-to-date period compared with the industry’s rise of 34.9%.

Strong Traction for EPYC Processors Bodes Well

Robust features and favorable trends have bolstered adoption of AMD’s second-gen EPYC processors among the cloud computing and data center providers.

Alphabet’s Google Cloud division expanded use of second-gen EPYC processors to provide enhanced security features to customers. Google Cloud’s latest Confidential Virtual Machines (“VMs”) leveraged second-gen EPYC processors’ Secure Encrypted Virtualization feature to help customers encrypt sensitive data not only when it is at rest, but also while it is being processed.

Moreover, Dell Technologies’ Dell EMC solution for Azure Stack HCI and its XC appliance called Dell EMC XC Core XC6515 are powered by second-gen AMD EPYC and EPYC processors, respectively.

Microsoft’s cloud computing platform — Azure — also selected AMD’s second-gen EPYC processors to power its Azure NVv4 VMs. This will enable Azure to provide customers with a cloud-based virtual desktop capable of handling high performance computing workloads.

Amazon (AMZN - Free Report) implemented EPYC processors to power the latest Elastic Compute Cloud (EC2) C5a instances of Amazon Web Services.

Hewlett Packard Enterprises utilizes second-gen EPYC processors for its DL385 and ProLiant DL325 Gen10 servers with HPE Nimble Storage dHCI which are well-suited for VDI workloads. The company also selected second-gen EPYC processors to power its SimpliVity 325 Gen 10 HCI solution. The solution doubles the number of cloud-based virtual desktops supported per server from 300 to 600, which provides organizations with a 50% lower cost per remote worker.

These major deal wins indicate a positive trend for AMD’s latest processors and are expected to drive the company’s top line in the quarters ahead. The momentum is likely to be driven by rapid growth in the cloud computing market. Per a MarketsAndMarkets report, cloud computing market is projected to witness a CAGR of 17.5% between 2020 and 2025.

Moreover, the coronavirus-induced work-from-home wave and increased use of online school solutions are driving demand for cloud computing solutions. These are favoring prospects of AMD.

Persistent Risks

AMD is likely to be negatively impacted by COVID-19 induced supply-chain constraints and broader macroeconomic weakness prevailing in the market.

Also, increasing expenses on product development amid stiff competition from Intel (INTC - Free Report) and NVIDIA are likely to lead to pricing pressure and hurt profitability in the near term.

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