Shares of Advanced Micro Devices (AMD 0.83%) rose 148.4% in 2019, according to data from S&P Global Market Intelligence. The chip designer held on to a rare manufacturing process lead over archrival Intel (INTC -0.21%) to boost its presence in the markets for data center computing and high-end gaming machines.
AMD's manufacturing partners are already able to crank out large-scale production runs of processors using 7-nanometer chip traces. Meanwhile, Intel is only getting started on 10-nanometer production runs. Intel is usually the top dog in these manufacturing process battles, giving the larger company a far more cost-effective production platform. But the world turned upside down in 2018, so AMD holds that ace card these days.
The process advantage is not an academic trump card. AMD started shipping 7-nanometer PC processor and graphics chips in the third quarter, and the market embraced these products with open arms. The company posted its highest single-quarter revenue haul since 2005 while also expanding its profit margins across the board.
"We have the strongest product portfolio in our history," CEO Lisa Su said in the third-quarter earnings call. "We're on track to exit 2019 with another quarter of significant growth, driven by the ramp of our 7-nanometer products and believe we are well-positioned to build our momentum in 2020 and beyond as we deliver an even stronger set of leadership products that can drive sustained growth, an increased share of the $75 billion markets for high-performance computing and graphics technologies."
That's exciting stuff. AMD operates from a position of strength for the first time in more than a decade, and the skyrocketing stock returns make sense against that backdrop.