The hottest stock in the S&P is a nearly 50-year-old chip maker

Big chip fall hard.
Big chip fall hard.
Image: AP Photo/Matthias Rietschel
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The best performing stock in the S&P 500 this year isn’t Google or Nvidia or Domino’s, but AMD—a chipmaker that’s recently changed its strategy to chipping away Intel’s data-center revenue.

The company, founded in Silicon Valley in 1969, has historically played the role of lagging competitor rather than star of its own show—it’s been overshadowed by Intel’s dominance in the central processing unit (CPUs) market and Nvidia’s meteoric rise on the back of demand for its graphics processing units (GPUs).

But now AMD’s stock growth is outperforming both its major competitors, thanks to strong earnings reports and new products meant for commercial data centers. The stock has risen about 120% in 2018, compared to Nvidia’s 28% growth and Intel’s loss in stock value since the unvalorous exit of CEO Brian Krzanich.

Its most recent bright spot was the launch of its new Radeon server card, which makes it easier to run virtual PCs at the same time on data centers. This kind of enterprise-focused product is exactly what investors want as AMD looks to steal market share from Intel—AMD stock jumped more than 6% on the announcement.

Other than targeted products and reports of market share gains, there’s no secret—the company has simply been on a seven-quarter tear, consistently beating Wall Street’s projections.

This is bad news for the many investors betting against AMD, so-called short sellers, who have lost an estimated $3 billion on paper. That’s far more than what Elon Musk was recently able to squeeze (paywall) out of his nemeses, the Tesla shorts, when he pondered taking the electric-car maker private.