What happened

Shares of Advanced Micro Devices (AMD 3.70%) jumped 7.5% on Wednesday, as a broad rise in tech stocks helped drive the Nasdaq Composite index sharply higher.  

So what 

AMD's gains come after bullish analyst remarks earlier this week. On Tuesday, D.A. Davidson analyst Ben Wilson highlighted what he says is a rapid deployment of AMD's processors by Amazon (AMZN -0.17%). The e-commerce giant is reportedly ramping up its use of AMD's next-gen chips on its Amazon Web Services cloud computing platform, which Wilson sees as a powerful growth driver for AMD's data center business. 

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Wilson's observations support the investment thesis laid out by Jefferies analyst Mark Lipacis on Aug. 4. Lipacis expects AMD to rapidly eat into Intel's (INTC 2.13%) data center market share, due in part to the latter's difficulties in transitioning to new 7-nanometer chips. Lipacis says Intel's struggles could help AMD seize 50% of the server market within the next five years, up from roughly 10% today. 

Now what

Intel's problems are certainly working in AMD's favor. A cloud computing titan like Amazon quickly adopting its newest chips bodes well for AMD's future. The chipmaker's shares are already up an impressive 80% so far in 2020, but if it can continue to press its advantage over the ailing Intel, more gains could lie ahead for AMD's shareholders.