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AMD held a "Next Horizon" event on Tuesday, unveiling its 7-nanometer graphics products and microprocessors. During the event, AMD said Amazon will use its new processors for Amazon Web Services. That will give some Amazon Web Service customers lower prices for their cloud services.  Watch AMD trade live. AMD was rallying on Tuesday, up 7%, after Amazon said it would use AMD's new line of processors for its cloud business. During AMD's "Next Horizon" event, the chipmaker unveiled its 7-nanometer graphics products and microprocessors, and said it was partnering with Amazon Web Services (AWS) to provide new general purpose (M5 and T3) and memory-optimized (R5) instance types with AMD EPYC processors that are 10% less expensive than the current M5, T3, and R5 instances. Simply put, the agreement will give some customers lower prices for their Amazon cloud services. The AMD-based instances provide additional options for customers who are looking to achieve cost savings on their Amazon EC2 compute environment for a variety of workloads, such as microservices and virtual desktops, Amazon said in a press release. "One thing our customers agree on is that they all like lower prices," said Matt Garman, vice president of AWS in a statement. “Apart from adding to what is already the broadest and most capable set of compute services available in the cloud, these new AMD-based instances give customers an even lower priced way to run many of the most common applications.” While Amazon showed confidence in AMD's new 7nm data-center products, Morgan Stanley analyst Joseph Moore was bearish about the new lineup ahead of the event. "Based partly on feedback from AMD, we wanted to be clear that EPYC 2 will not be shipping for revenue until next year (which has been our expectation), and calling this a product launch is probably an overstatement," Moore said. He has a sell rating and price target of $17 for AMD — 15% below where shares were trading. AMD was up 94% this year. Read more stories on AMD: AMD has tumbled into a bear market — here's why analysts say it's time to buy AMD is getting smoked after revenue misses, guidance falls short  AMD's stock price reflects a 'scenario we don't believe possible,' analyst says Join the conversation about this story » NOW WATCH: The first woman in space almost didn't make it back to Earth and she had to keep it a secret for 30 years