Key Points

• AMD just acquired Brium, an AI software company.

• The move follows several acquisitions in AI, including ZT Systems.

• The stock is reasonably priced after falling sharply over the last year.

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AMD (NASDAQ: AMD) might be the biggest sleeper stock in the artificial intelligence (AI) chip business right now.

The stock is down nearly 50% from its peak last year. It seems investors got ahead of themselves in betting on AMD to break through in AI chips and challenge Nvidia.

However, while the stock has tumbled, AMD's data center business is gaining traction. Revenue in the AI-focused segment jumped 57% in its first quarter to $3.7 billion, driven by growth in its EPYC central processing unit (CPU) and Instinct graphics processing unit (GPU) franchises.

In addition to that momentum, AMD has also been making a number of moves to rearrange its portfolio to position it better for the AI era.

In the first quarter, AMD acquired ZT Systems for $4.9 billion to help provide rack-scale solutions and high-performance systems, scaling up from its semiconductor business.

After making that move, AMD turned around and said it would sell the server manufacturing business to Sanmina for $3 billion and continue to focus on design, rather than manufacturing. AMD is retaining ZT Systems' "rack-scale AI solutions design and customer enablement expertise."

However, that's not the only deal AMD has made to advance its AI ambitions. It just announced the acquisition of Brium, a technology company that helps make AI software work across various hardware platforms. The move should help AMD better compete with Nvidia, as AI workloads are typically optimized for Nvidia's CUDA programming ecosystem.

The deal was AMD's fourth AI acquisition in the last two years (the others being Silo AI, Nod.AI, and Mipsology). Silo AI was the largest private AI lab in Europe before AMD acquired it for $665 million, giving the company a team of world-class AI scientists and engineers.

Nod.ai, an AI software company, gave AMD a similar boost in AI software for products like the Instinct data center GPUs, and Mipsology helped beef up AMD's inference software capabilities.

What it means for AMD

None of these acquisitions have had a significant impact on AMD's share price, but combined, the moves show the company is clearly being aggressive with its AI strategy and that it understands the assignment. It needs to beef up its AI ecosystem to go beyond chips, which the ZT Systems deals help accomplish, and it needs to challenge the supremacy of CUDA or find a way around it.