Why A.M.D.’s Stock Is Outperforming Intel’s

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Why A.M.D.’s Stock Is Outperforming Intel’s


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A turnaround that started in 2014 is beginning to pay off for Advanced Micro Devices’ shareholders.

The chip maker’s stock hit an 11-year high of $22.29 on Thursday and is up 103 percent for the year. Its second-quarter results for 2018 showed sales up 53 percent compared with the same period a year earlier, buoyed by the success of computing, graphics and enterprise hardware. By contrast, its longtime rival Intel is up just 1.8 percent this year, and it reported a 15 percent increase in sales in the second quarter compared with last year.

A.M.D.’s shares are easily the best performing among the chip makers in the Standard & Poor’s 500-stock index.

That is quite a reversal. A boom in mobile devices and video games, as well as the rise of artificial intelligence and autonomous driving, sent shares of chip makers soaring. Since the start of 2016, shares of semiconductor companies in the S. & P. 500 as a whole have nearly doubled. But shares of A.M.D. had lagged behind its rivals.

For years, A.M.D. produced processors whose main attraction was price. When Lisa Su took over as chief executive of the company in 2014, she sought to change that. But in the semiconductor industry, new products take years to develop, and so the efforts have only recently borne fruit.

The company’s Ryzen chips, used in high-performance enterprise and gaming computers, outperform Intel’s flagship processors. Many computer makers, including Acer, Asus, Dell, HP, Huawei, Lenovo and Samsung, have begun using them in their devices.

Its graphics chips — a growth area, because such processors are commonly used for artificial intelligence computation — have sold well, too. And its new Epyc data-center chips used by companies like Baidu, Cisco, Microsoft and Tencent are gaining traction in a market traditionally dominated by Intel.

It is also preparing next generation chips based on a so-called seven-nanometer architecture, ready later this year. Smaller nanometer manufacturing technology has traditionally provided faster chips.

Intel has weathered a spurt of bad news over the past year. Computer security experts have discovered two major security flaws — named Meltdown and Spectre — that affected its chips. Its chief executive, Brian Krzanich, resigned over a relationship with a subordinate. And Intel announced delays to its own next generation hardware.



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