10 Best Semiconductor Stocks to Buy for the AI Boom

4. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Holders: 107

Advanced Micro Devices, Inc. (NASDAQ:AMD) designs digital semiconductors for PCs, gaming consoles, data centers, industrial applications, and automotive markets. Known for its expertise in CPUs and GPUs for PCs and data centers, AMD also supplies chips for leading gaming consoles like the Sony PlayStation and Microsoft Xbox. In 2022, AMD acquired Xilinx, a leader in field-programmable gate arrays, to diversify its portfolio and expand opportunities in key markets such as data centers and automotive.

The shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) are down -26% in the last year, but the company shows signs of improving business environment and growth opportunities. AMD currently experiences strong performance in the server CPU and PC markets, driven by its focus on technology leadership, consistent execution, and close collaboration with customers. The company is optimistic about the growth opportunities in the AI market, both in data center GPUs and AI-enabled PCs, while also expecting a gradual recovery in its gaming and embedded segments. AMD laid out a detailed strategy to expand its gross margins through continuous innovation and operational efficiency, and it views itself as a high-performance computing company, open to addressing customer needs across different architectures.

Advanced Micro Devices, Inc. (NASDAQ:AMD) management commented on their explosive data center opportunity, which they expect will fuel the company’s growth until the end of the decade, during the Barclays 22nd Annual Global Technology Conference. Here is what they said:

“Last year, I was here our MI 300x revenue was 0. And so, it’s amazing during this 2024 what we have done as a company from 0 to like going about $5 billion for this 2024. That’s a great success. I think when you look ahead at 2025, we continue to see the continued investment in AI infrastructure build-out that has been ongoing with all our customers, and you guys can see the third-party data also.

Secondly, user case has been increasing dramatically, right? Every week, we see some new use cases in AI, which definitely when you do the influencing, when you have those use cases, you drive return on investment. So, the backdrop of the market continued to be very strong. And for us, the team has been executing extremely well. MI300 ramping successfully and now MI325, we launched literally this quarter, we’ll start to see revenue in the first quarter next year and then MI350 second half next year. So when you look into 2025, we actually have a much stronger product portfolio versus the 2024.”