4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 124
Annual Sales Growth Over the Past 5 Years: 31.41%
Based in Santa Clara, California, Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading global semiconductor company specializing in the development of computer processors and related technologies for both business and consumer markets.
Stifel reiterated its Buy rating and $200 price target on Advanced Micro Devices, Inc. (NASDAQ:AMD) in a note on June 19, despite the stock’s lagging performance compared to the broader market and rival Nvidia. Analysts acknowledge mixed sentiment around AMD due to concerns about its future performance in AI, PC, and server markets. However, the note emphasizes three key drivers for AMD’s medium-term growth: AI infrastructure investment, continued x86 CPU share gains, and AI-driven PC refresh cycles.
Conversely, some analysts are less optimistic about AMD. On June 10, Morgan Stanley downgraded Advanced Micro Devices, Inc. (NASDAQ:AMD) to Equal-Weight from Overweight, maintaining a $176 price target. While the firm still supports the overall narrative, it believes investor expectations for the AI business are too high, leaving little room for upside even if the core business recovers. Morgan Stanley also notes that AMD appears expensive compared to other large-cap AI players like NVIDIA Corporation and Broadcom Inc., where analysts have more confidence in upward revisions to AI forecasts.
In the first quarter of 2024, 124 hedge funds tracked by Insider Monkey held stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD). The most significant stake was held by Ken Fisher’s Fisher Asset Management, valued at $5.2 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.”
