Whatever you do, don’t underestimate Lisa Su.
That’s exactly what Wall Street did when the veteran chip executive became the CEO of a storied Silicon Valley firm a little less than seven years ago.
Today, it’s a far different story. Wall Street now sings Su’s praises.
When Su’s appointment was announced on October 11, 2014, the stock went exactly nowhere.
Even worse, over the next nine months, the stock was off by more than 30%.
On the surface, you can see why. The company she was about to helm was bleeding cash and losing money.
There were rumors all over the Valley that one of the world’s more important chip firms would soon seek bankruptcy protection.
The reason: in 2012 alone, Su’s company lost more than $1 billion.
But now, Under Su, the stock has gone from $2.62 to a recent close of $75.50.
Per-share profits are doubling every 11 months.
Let me show you why there’s still plenty of upsides ahead…
The Microchip Challenger
Make no mistake, when Su became the first female CEO of a major chip firm, her company was definitely among the walking dead.
The company’s 2012 losses alone wiped out two previous years of profits. Within months, the company laid off 15% of its workforce, a move that damaged its reputation in the midst of a huge tech boom.
The skeptics clearly didn’t understand that Su is a visionary leader with very deep expertise.
Consider that some two years after assuming the top job, she still hadn’t made the list of top semiconductor CEOs as compiled by the trade journal Electronics Weekly.
But she turned out to be just what the company needed to get back on track and reward shareholders with price appreciation.
The result was nothing short of a stunning turnaround.
Advanced Micro Devices Inc. (AMD) now ranks as one of the more respected chip firms in the world today.
No doubt, part of that stems from the fact that AMD has released chips that have a smaller architecture and faster speeds than crosstown rival Intel Corp. (INTC).
But it’s the story of how Su pulled off that daring accomplishment that shows why she has added as much as $80 billion in shareholder value.
And it explains why we’re always on the prowl for visionary leaders with track records of handing big profits to their investors.
For Su, if you take a close look at her background, you can see she had trained for this role since she was a kid.
Born in Taiwan, she moved to the US as a toddler and grew up in Queens, New York.
At age 10, she used to take apart and fix her brother’s remote-control cars, an unusual hobby for a young girl of that era.
In her freshman year at the Massachusetts Institute of Technology, she got a gig testing silicon wafers used in chip production for graduate students.
After college, she began her career at International Business Machines Corp. (IBM) and spent 13 years there. In 2007, she became the chief technology officer at Freescale, now a part of NXP Semiconductors N.V. (NXPI).
She joined AMD in 2012 as a vice president, climbing to CEO in just 30 months. For the first two years, she had the top job at the famous chip firm, the media took little notice.
But under her guidance, the company has won more than 100 awards for its high-speed chips that power gaming, the cloud, and high-performance computing.
Ironically, back in 2014, Su received just one accolade. Ditto for 2015 when she was named a visionary leader by a local newspaper.
Since that time, she has received nearly 20 honors, either from industry groups or major media.
In 2019, the prestigious Harvard Business Review named her one of the world’s top 100 CEOs. Barron’s named her one of the best CEOs around and Fortune ranked her as “the most powerful woman in business.”
All of which brings me around to the most recent round of major applause she’s received.
Su was recently the subject of a major flattering profile in Investor’s Business Daily.
The noted financial daily even said she pulled off arguably the greatest tech turnarounds since the late Steve Jobs returned to Apple Inc. (AAPL) in 1997.
In fact, the paper even quoted Cowen analyst Matt Ramsay as saying AMD’s rebound has “been the most miraculous turnaround in semiconductors.”
Su recently made a bold move that will add even more growth to the company’s chip units.
Last October, AMD agreed to buy Xilinx Inc. (XLNX), which has deep expertise in the growth field of programmable circuits.
This is something the old AMD never could have pulled off. A company with a stock worth just $2.50 a share would never be able to buy one trading at more than 50 times that amount.
Make no mistake. With Su at the helm, AMD still has plenty of upside ahead.
In its most recent quarter, AMD grew its per-share profits by a stunning 189%.
That boosted the firm’s three-year average to 81%. As I noted earlier, at that rate, earnings per share double every 11 months.
So, let’s cut that back by 50% to be conservative. We’d still see a double in roughly 20 months.
Add it all up and you can see why I suggest tech investors “hire” Su themselves by buying AMD.
With an aggressive CEO like Su in your corner, your portfolio is going to grow through her relentless drive to create long-term wealth for her investors.
It’s also a great example of how a dedicated commitment to staying ahead of the tech curve can be such a great source of profits.
You can see the same thing looking at one of the hottest new developments in computing, blockchain technology. This cutting-edge technology is projected to unleash $3.1 trillion in new wealth.
I talk about how to claim the biggest possible share of it right here.
Cheers and good investing,
Michael A. Robinson