Analyst Note| Abhinav Davuluri, CFA |
Xilinx reported fiscal first-quarter results ahead of FactSet consensus expectations, led by record automotive revenue and strong wireless sales related to 5G. Due to the pending merger between Xilinx and AMD, the firm did not host a conference call to discuss the results or provide guidance. We are raising our probability-weighted fair value for Xilinx to $167 per share from $157 per share, due to an increase in our standalone fair value estimate for AMD. We assign a 75% probability to Xilinx shareholders receiving $193 per share of value from AMD of (based on our $112 combined fair value times the exchange ratio of 1.7234 shares). The remaining 25% probability stems from our unchanged $90 fair value for standalone narrow-moat Xilinx. We think prospective investors should find current levels attractive, similar to how we also view shares of standalone AMD as attractive.