Advanced Micro (AMD) To Shift Headquarters To Santa Clara

Advanced Micro Devices, Inc. (NASDAQ:AMD) recently announced that it will move out of its Sunnyvale headquarters to a 220,000 square foot, six-storied building in Santa Clara featuring modern amenities and features.

The company intends to shift to the new facility during the second half of 2017.

Why this Move?

The decision is an attempt to reduce the company’s large footprint at One AMD Place. Efficiency and renovation are two other factors leading to the shift to the Santa Clara location.

As per some media reports, Advanced Micro has signed a long-term agreement with the Irvine Company for the under-construction site in Santa Clara Square (NYSE:SQ) that will include office spaces and retail shops alongside apartments. The Irvine Company has already signed on Ericsson (ST:ERICAs) and the Cambridge Industries Group for the mixed-use hub.

We also note that the 319,000 square-foot campus in Sunnyvale was acquired by the Irvine Company from W. P. Carey for $175 million for building apartments a few weeks ago. However, Advanced Micro’s management stated that the acquisition of the Sunnyvale location by the Irvine Company was not the reason for the company’s relocation decision. Rather, Advanced Micro wanted to have its own building and hence the move.

Competition Comes Closer

The move to Santa Clara brings AMD’s headquarters closer to those of its two major competitors Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA) . While the former is a tough contender in the CPU space, the latter is a graphics processor behemoth. However, given the good growth trend in the video gaming industry, along with some of the company’s innovative products such as “Zen” microarchitecture, Advanced Micro Devices looks poised for steady growth ahead.

Zacks Rank

At present, Advanced Micro Devices has a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology space is Alpha & Omega Semiconductor, Ltd. (NASDAQ:AOSL) , sporting a Zacks Rank #1 (Strong Buy).