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AMD: tech's longest running roller coaster

AMD's the longest running roller coaster in tech history: 25 years and counting.

On March 21, 1983, AMD went public. Adjusted for splits, the stock closed at $9.00 that day. Today, shares of AMD closed at $7.95. That means if you invested $10,000.00 in AMD's IPO, today you'd have $8,833.33. Adjusted for 25 years of inflation, that would be about a buck and a half.

Just to calibrate that, the same investment in Intel would have gotten you about a half a million dollars, Texas Instruments about $150,000, both the NASDAQ and S&P 500 about $100,000; even National Semiconductor and LSI beat AMD, although not by much.

Of course, some investors have figured out that you can make a fortune playing the AMD roller coaster. Except for the tech bubble and a brief spike two years ago, the stock has traded in a relatively narrow range. Seems like a nerve-wracking way to invest, but I know people who swear by it.

To be sure, chips are a tough business. Designing complex microprocessors with 100 million transistors and building billion dollar fabs to manufacture them is the pinnacle of the high-tech world. What AMD does requires the toughest of the tough.

Advanced Micro Devices, Inc.

Still, performing technical miracles year in and year out for a quarter of a century, with only erratic profitability and thousands of disappointed shareholders to show for it, has to be demoralizing. Sure, it's great for consumers, but long-time executives and investors must be suffering from chronic depression by now.

Speaking of executives, founder Jerry Sanders played second-source fiddle to Intel for two decades. For the past five years it's been Hector Ruiz's turn at the helm. The two executives couldn't be more different: Sanders was a notoriously egotistical salesman, while Ruiz is an even-keeled technologist.

About halfway through his tenure as CEO, Ruiz was beginning to look like the guy who could actually break the company out of its bipolar existence. Just two years ago, AMD had managed its second consecutive year of profitability and the stock was trading near record levels.

Then, right on schedule, the roller coaster began its plunge. Amidst chronic execution problems, key product delays, and a staggering $2 billion in losses over the past four quarters, analysts are wondering when the stock will bottom out. For those who play the roller coaster for a living, the bigger question is how long will it take to bounce back?

Only one thing's for sure. Intel may be the biggest one-hit wonder of all time, but it's one hell-of-a hit and nobody can beat the chip giant at its own game. So, as long as AMD continues to slug it out with its next-door neighbor, rest assured: there will be good years and there will be bad years.