For 2019, TheStreet has compiled a list of the top 25 stocks of the year, looking at everything from stock performance and quarterly results versus expectations to execution against strategy and each stock’s overall story.
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People like rooting for the underdog. And that's probably a big reason why -- among PC enthusiasts, chip geeks and investors alike -- AMD (AMD) - Get Advanced Micro Devices Inc. Report has developed a cult following over the years.
But that's not the only reason. AMD's story in recent years hasn't simply been a corporate version of David versus Goliath, but one in which "David" has landed a few good blows against a much bigger nemesis that not too long ago had little trouble pushing him around...and has richly rewarded those who bet on him.
Following its latest rally, AMD's stock is up more than 120% in 2019 and more than 20-fold from its early-2016 lows. Along the way, the CPU and GPU developer has gone from being the subject of bankruptcy speculation to being a solidly profitable firm that has a healthy balance sheet and -- with the help of both good execution and Intel's (INTC) - Get Intel Corporation Report surrendering of an age-old manufacturing technology lead to AMD supplier Taiwan Semiconductor (TSM) - Get Taiwan Semiconductor Manufacturing Company Ltd. Report -- is taking meaningful share in some lucrative CPU markets.
In the desktop CPU market, AMD made waves this summer by launching third-gen offerings for its Ryzen desktop CPU family that often outperformed comparably-priced Intel CPUs, particularly with workloads involving multiple CPU threads. One of these CPUs -- the $499, 12-core, Ryzen 9 3900X -- ended up being sold out at major retailers for months.
In November, the company followed this up by launching three very powerful desktop CPUs, including the first third-gen chips for its Ryzen Threadripper high-end desktop (HEDT) family, that further cemented its transformation from a discount PC CPU brand into something very different.
In a server CPU market where Intel has long maintained a 90%-plus share, but for which AMD is aiming for a double-digit share by mid-2020, AMD is four months removed from unveiling its second-gen Epyc server CPU family (codenamed Rome). The CPUs, which feature up to 64 cores, have received glowing reviews thanks to the amount of bang they provide for the buck, and have landed a string of major cloud and supercomputer design wins. This includes wins with Alphabet/Google (GOOGL) - Get Alphabet Inc. Report , which has said it will use Rome CPUs both for internal workloads and cloud computing instances.
AMD also made some headway in other fields. In the gaming GPU market, the company launched fairly competitive mid-range products based on its new Navi architecture. In cloud gaming, the company is supplying the GPUs used by Google's Stadia service, and is expected to do the same for Microsoft's (MSFT) - Get Microsoft Corporation Report nascent xCloud service. And in the notebook processor market, AMD gained ground with the help of solid design win activity for its second-gen Ryzen Mobile notebook processors, which launched early in the year.
Also, though it wasn't a shock to learn that Microsoft and Sony's (SNE) - Get Sony Corp. Report next-gen game consoles (due by the 2020 holiday season) will be AMD-powered, given AMD's status as the processor supplier for the Xbox One and PlayStation 4, the specs revealed for the custom AMD processors that will power each of the devices were fairly impressive.
There are still some markets where AMD, whose R&D budget remains much smaller than either Intel or Nvidia's undefined in spite of recent spending hikes, has a tough fight on its hands. Though new Ryzen Mobile processors due in early 2020 could make the battle more interesting, Intel remains quite competitive in much of the notebook processor market. And Nvidia is still dominant in the server, workstation and high-end gaming GPU markets.
Also, as competitive as AMD's desktop and server CPUs often are on a technical level, taking significant share from Intel at some of the enterprise accounts where the chip giant has been deeply entrenched for decades could prove easier said than done.
Nonetheless, it's safe to say that the debate about AMD's future growth prospects has changed quite a lot since the not-too-long-ago days when its survival was called into question. And certainly, the investor debate about what kind of valuation AMD's stock deserves has changed a lot as well.