Which Tech Giants Might Buy Applied Micro?

In a new report, Detwiler Fenton analyst Jeff Johnson discussed some big names that might have Applied Micro Circuits Corporation (NASDAQ: AMCC) on their shopping lists.

According to Johnson, Applied Micro is the furthest along of the semiconductor companies working in the ARM server market. Detwiler Fenton expects Applied Micro will debut a 96-core chip within the next month, which will demonstrate its lead over closest rival Cavium Inc (NASDAQ: CAVM).

Possible Buyers

Since Apple Inc. (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), Amazon.com, Inc. (NASDAQ: AMZN) and Microsoft Corporation (NASDAQ: MSFT) have all recently launched their own internal ARM-based server chip initiatives, Johnson concluded a buyout of Applied Micro would make a lot of sense for any of these big tech names.

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“Throw in the fact that ARMH (ARM Holdings plc (ADR) (NASDAQ: ARMH)) believes that by 2020, its share of the server market will jump to 25 percent (up from ~1 percent today), and it’s not surprising we’re seeing growing interest in ARM server solutions from AAPL, GOOG etc.,” he added.

Johnson also mentioned QUALCOMM, Inc. (NASDAQ: QCOM) as another potential buyer of Applied Micro or Cavium.

Disclosure: The author holds no position in the stocks mentioned.

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