5. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Based in Santa Clara, California, Advanced Micro Devices, Inc. (NASDAQ:NASDAQ) is a leading global semiconductor company known for developing computer processors and related technologies for both business and consumer markets. AMD plays a crucial role in the AR industry by providing chips that power immersive experiences in various AR and VR devices.
AMD’s market share in discrete graphics continues to grow, and the company’s share of the server processor market is expected to surpass the current 25%. With the upcoming release of the next-generation Instinct GPU product line, including the MI325X expected in Q4 2024, and the Zen 5 architecture promising significant IPC improvements, AMD is well-positioned to maintain its competitive advantage. Additionally, on July 10, the company’s shares rose over 3% following the announcement of an agreement to acquire Silo AI, the largest private AI lab in Europe, in an all-cash transaction valued at approximately $665 million. This acquisition aligns with AMD’s strategy to offer comprehensive AI solutions based on open standards.
Moreover, Advanced Micro Devices, Inc. (NASDAQ:AMD) remains a formidable player in the semiconductor industry, with New Street Research maintaining a Buy rating on the stock, setting a one-year target price at $235 and a long-term target for 2026 at $345. The optimistic outlook is supported by AMD’s consistent revenue growth and market share expansion in the datacenter GPU segment. Additionally, Citi Research raised its price target from $176 to $210, reflecting a positive view of AMD’s AI sales and PC CPU business.
In the second quarter of 2024, 108 hedge funds tracked by Insider Monkey held stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD), with the largest stake held by Ken Fisher’s Fisher Asset Management, valued at $3.75 billion.
Meridian Contrarian Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor chip maker specializing in central processing units (CPUs), which are considered the core component of most computing devices, and graphics processing units (GPUs), which accelerate operations running on CPUs. We invested in 2018 when it was a mid-cap value stock plagued by many years of underperformance due to lagging technology and lost market hi share versus competitors Intel and Nvidia. Our research identified that changes and investments made by current management under CEO Lisa Su had, over several years, finally resulted in compelling technology that positioned AMD as a stronger competitor to Nvidia and that its latest products were superior to Intel’s. We invested on the the belief that AMD’s valuation at that that time did not reflect the potential for its technology leadership to generate significant market share gains and improved profits. This thesis has been playing out for several years. During the quarter, AMD unveiled more details about its upcoming GPU products for the AI market. The stock reacted positively to expectations that AMD’s GPU servers will be a viable alternative to Nvidia. Although we pared back our exposure to AMD into strength as part of our risk-management practice, we maintained a position in the stock. We believe AMD will continue to gain share in large and growing markets and is reasonably valued relative to the potential for significantly higher earnings.”
