In this article, we will discuss the 10 best WallStreetBets stocks to buy right now.
Is Now the Time to Cash Out?
Market trends indicate that significant gains may have already been realized as the economy approaches an easing cycle. Historically, after the first rate cut, markets tend to remain stable or slightly increase in the following weeks. Despite some recent pullbacks in tech stocks, a large portion of the S&P 500 is performing well, suggesting strong market momentum. While concerns about high valuations exist, they are not unprecedented compared to historical averages.
Caution is advised amid economic uncertainties, and shorter-duration bonds may serve as a protective strategy against rapid rate cuts by the Fed. A focus on strong fundamentals and adaptability to market changes is recommended. Just a day earlier, Liz Young Thomas, SoFi head of investment strategy, shared her insights regarding the market’s current trajectory as it seems to be reaching an easing cycle. We shared her sentiments in another one of our articles, 8 Most Active US Stocks To Buy Now. Here’s an excerpt from it:
“Historically, after the first rate cut, markets tend to remain flat or slightly up in the following 30 to 60 days. 3 months post-cut, the market evaluates whether these cuts were necessary due to cooling economic conditions or if they were merely opportunistic adjustments…
When discussing valuation concerns, Young agreed that while US market multiples are relatively high, hovering around 21 to 22, this is not unprecedented when compared to historical standards. She pointed out that current valuations are above both the 5-year and 10-year averages but not at overbought levels. Young referenced Warren Buffett’s long-term investment philosophy, emphasizing that he does not focus on timing market multiples but rather on fundamental growth.
Young expressed a desire for the market to shift towards trading based on fundamentals rather than multiple expansions. She noted that while earnings stability is crucial, there are signs of strength in sectors outside of technology, particularly in industrial stocks. However, financials have shown mixed signals.”
On October 1, Mona Mahajan, Edward Jones senior investment strategist, appeared on CNBC’s ‘Squawk Box’ to discuss these latest market trends, and where investors can find opportunities right now.
In an earlier discussion, Fed Chair Jerome Powell indicated that he is not in a rush to cut interest rates, despite a strong start to September. Building on this conversation, Mona Mahajan noted that the stock market has experienced a remarkable 20% increase year-to-date and had a solid performance in the first three quarters of the year. However, as the market heads into the seasonally volatile months leading up to Election Day, there are expectations for potential bouts of volatility.
When asked if investors should consider cashing out and taking a holiday for the remainder of the year, Mahajan advised against such a move. Instead, she suggested that if there are pullbacks or corrections in the market, it would be prudent to lean into those opportunities. Historically, when the Fed cuts rates without an impending recession, it creates a favorable backdrop for broader market performance. Additionally, rate cuts typically lead to expanded valuations, particularly for sectors that have lagged behind in this regard. She emphasized that lower borrowing costs from Fed rate cuts would benefit both consumers and corporations.
The discussion also touched on the potential impact of upcoming elections on stock market performance. From a technical perspective, it was noted that the S&P 500 has historically pulled back between 5% to 10% around election time but tends to recover a few months post-election. Mahajan expressed confidence in this trend and highlighted that with Congress remaining divided, it might become increasingly challenging for any presidential administration to enact significant legislation or regulations.
In terms of investment strategies during potential downturns, she recommended focusing on cyclical sectors such as utilities and industrials while also maintaining exposure to technology and the artificial intelligence sectors. Mahajan underscored that diversification would be key over the next 12 to 18 months.
Conversely, she cautioned against being overly invested in cash or cash-like instruments or shorter-term bonds, as interest rates are expected to decline over the next year and a half. This sentiment aligns with broader expectations regarding Fed policy and its implications for various asset classes as interest rates continue to evolve.
Mahajan’s sentiment encapsulated a cautious yet optimistic outlook for the remainder of the year, with an emphasis on strategic positioning amidst potential market fluctuations driven by both economic factors and political developments. In that context, we’re here with a list of the 10 best WallStreetBets stocks to buy right now.
Methodology
We sifted through threads on WallStreetBets to compile a list of the top 25 trending stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q2 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best WallStreetBets Stocks To Buy Right Now
10. MicroStrategy Inc. (NASDAQ:MSTR)
Number of Hedge Funds: 26
MicroStrategy Inc. (NASDAQ:MSTR) provides business intelligence, mobile software, and cloud-based services. It offers a platform that allows users to create reports, dashboards, and conduct ad-hoc analyses, as well as a server for analytical processing and job management.
A lot of the company’s revenue comes from licensing arrangements and cloud-based subscriptions. Bitcoin acquisitions also have had a mixed impact on the company. These acquisitions generated substantial returns but also led to a significant increase in net debt, from $531 million to $3.8 billion. As of August, MicroStrategy Inc. (NASDAQ:MSTR) remains the world’s largest corporate holder of Bitcoin, owning 226,500 bitcoins, with a total market value of $15 billion.
In Q2 2024, the total Bitcoin holdings increased by 5.6%. There was a 7.44% year-over-year decline in overall revenue. Some of this decline was offset by the 21% year-over-year increase in subscription services revenue due to cloud migrations and new customers.
The company is at the forefront of blockchain technology, with initiatives like the Orange Protocol focusing on decentralized identification on the Bitcoin network. Despite a net loss in Q2 2024 and a decline in revenue, the company’s 10:1 stock split and Bitcoin Yield performance indicator demonstrate its commitment to shareholder value. Its planned $2 billion equity offering for additional Bitcoin purchases highlights its continued focus on expanding its Bitcoin holdings.
It has made significant strides in AI in recent years. Its strategic initiatives, including Auto Express, MicroStrategy ONE on Google Cloud Marketplace, and partnerships with Azure and AWS, have solidified its position in the AI industry. Despite challenges, the company presents promising investment opportunities its substantial returns from Bitcoin acquisitions provide a strong financial foundation for future growth.
Artisan Small Cap Fund stated the following regarding MicroStrategy Incorporated (NASDAQ:MSTR) in its Q2 2024 investor letter:
“Regarding MicroStrategy Incorporated (NASDAQ:MSTR), our decision to avoid this company comes down to a lack of conviction in its franchise characteristics. The stock has worked this year due to a rebound in the price of bitcoin. Since 2020, MicroStrategy has been focused on converting its cash and cash equivalent holdings, as well as issuing debt, to fund the purchase of bitcoin, which now makes up most of the company’s value.”
9. ZIM Integrated Shipping Services Ltd. (NYSE:ZIM)
Number of Hedge Funds: 26
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is an international cargo shipping company and one of the top 20 global carriers. It offers a range of shipping services, including cargo transportation, land transportation, and specialized solutions for various types of cargo. Its operations span over 90 countries and services touch ~300 ports worldwide, helping it create a diverse customer base of 32,000+ clients.
The company’s competitive advantage lies in its agile fleet management and deployment strategy. It’s modernizing its fleet with 46 new container ships, 28 of which are powered by liquefied natural gas (LNG). As of mid-May, the company had already received 30 of these vessels, with the remaining 16 expected to arrive by the end of 2024. Upon completion, over half of its operated capacity will consist of these new, energy-efficient ships.
The company currently operates 148 vessels, including 132 container ships with a total capacity of ~755,000 TEUs, as well as 16 car carriers. In Latin America alone, it grew volume by 90% compared to Q2 last year and 8% sequentially.
In Q2 2024, the company grew its revenue by 47.57% year-over-year, accounting for $1.93 billion. It also showed 11% improvement in its carried volume as compared to the same quarter last year, with management attributing this success to the strategic increase in ZIM Integrated Shipping Services Ltd.’s (NYSE:ZIM) exposure to the spot market, which allowed it to capitalize on elevated rates that have persisted longer than anticipated.
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) is well-positioned for growth due to its strong financial position, focus on niche markets, and commitment to innovation. The company’s asset-light model and high dividend yield make it an attractive investment option.
8. Antero Midstream Corp. (NYSE:AM)
Number of Hedge Funds: 28
Antero Midstream Corp. (NYSE:AM) owns, operates, and develops midstream energy assets. It offers gathering and compressions, water distribution, clearwater facility, fractionation, and pipeline safety services, and is a key player in the Appalachian Basin energy market, supporting the production and delivery of natural gas and NGLs.
Natural gas is a promising commodity due to its cleaner nature compared to coal and its increasing adoption in emerging markets. Demand is driven by power generation, industrial applications, hydrogen production, and transportation. Midstream companies, like Antero Midstream Corp. (NYSE:AM), benefit from increased natural gas volumes as they provide essential infrastructure.
It supports the operations of natural gas and natural gas liquid producer Antero Resources (AR). As a majority shareholder with a 29% stake, Antero Resources has significant control over Antero Midstream Corp. (NYSE:AM). Its revenue is primarily derived from Antero Resources, which operates in the Marcellus and Utica basins. Despite declining natural gas prices, Antero Resources has maintained profitability in Q1 2024 due to its favorable cost structure.
The company’s majority market share in the Appalachian Basin positions it well to capitalize on rising demand. Its deep reserves and industry-leading breakeven prices offer a competitive advantage. In the second quarter of 2024, revenue increased by 4.46% year-over-year, generating a total of $269.80 million in revenue.
The company is expected to benefit from its recent acquisition of Summit Midstream Corporation, valued at ~$70 million. The acquired assets, located in the Marcellus Shale, are anticipated to immediately increase its free cash flow and support future growth plans. While the natural gas market faces potential headwinds, the company’s focus on operational efficiency and cost reduction positions it well for future growth.
7. Lamb Weston Holdings Inc. (NYSE:LW)
Number of Hedge Funds: 39
Lamb Weston Holdings Inc. (NYSE:LW) is a food processing company, one of the world’s largest producers and processors of frozen french fries, waffle fries, and other frozen potato products. It is known for its high-quality products, innovative offerings, and strong global presence.
It primarily supplies French fries to restaurant chains and food service distributors, with retail sales accounting for less than 20% of its revenue. McDonald’s is a major customer, representing 14% of the company’s sales in fiscal 2024. Revenue in FQ4 2024 was $1.61 billion, recording a 4.90% drop in year-over-year revenue.
Recent performance has been impacted by several factors, including weaker global restaurant traffic, softening demand for frozen potatoes, and increased industry capacity. These challenges are expected to continue through much of fiscal 2025, exacerbated by the company’s capacity expansion efforts. The company experienced a significant decline in its stock price recently when shares fell 55% in July from their 2023. This sharp drop has raised questions about whether the market has overreacted to a company with stable cash flows and a dominant market position.
While capital expenditures have risen significantly, they are expected to decline in the coming years, freeing up substantial cash flow. This could result in a significant increase in free cash flow per share, potentially boosting the stock price, positioning the company to grow as an industry leader.
Diamond Hill Long-Short Fund stated the following regarding Lamb Weston Holdings, Inc. (NYSE:LW) in its Q2 2024 investor letter:
“Still-rising valuations have made identifying attractively valued, long ideas increasingly challenging — though we still found a few in Q2 that we believe the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. We established new long positions in VeriSign, Ulta Beauty, Sysco Corporation and Lamb Weston Holdings, Inc. (NYSE:LW) during the quarter.
Lamb Weston is the US’s leading supplier of frozen French fries. Shares have been pressured amid a slowdown in quick-service restaurant traffic — which gave us a compelling opportunity to capitalize on what we consider a large dislocation in price and intrinsic value.”
6. Boeing Co. (NYSE:BA)
Number of Hedge Funds: 42
Boeing Co. (NYSE:BA) is a leading aerospace company that designs, manufactures, and sells airplanes, military aircraft, rotorcraft, rockets, satellites, and missiles worldwide. It also provides leasing and product support services and has operations in over 150 countries.
The company’s 737 MAX production saw a slight decline in Q2 2024, with approximately 90 pre-2023 737-8s remaining in inventory, primarily destined for Chinese and Indian customers, representing a decrease of 20 from the previous quarter. While management expects to deliver most of these planes by year-end, production will gradually wind down as the shadow factory is closed.
Inventory levels for the 737-7 and -10 models remained steady at around 35 airplanes, and certification timelines remained unchanged. The 787 program faced production challenges, including seat delays, resulting in lower deliveries. However, production is expected to reach 5 airplanes per month by year-end. Approximately 35 pre-2023 787s require rework, but progress is being made towards completing this process and shutting down the shadow factory by the end of the year.
Revenue for Q2 2024 missed expectations and was down 14.61%. However, its defense portfolio has seen significant advancements, including the delivery of 7 MH-139 helicopters to the US Air Force and the first CH-47F Block 2 Chinook to the US Army. A major milestone was reached with the F-15EX fighter jet program achieving initial operating capability.
As the company navigates these challenges, it must prioritize restoring its reputation and addressing safety concerns. Boeing Co.’s (NYSE:BA) Defense, Space, and Security (BDS) segment is a cornerstone of national security. As global defense spending continues to rise, the company becomes a compelling investment in the aerospace industry.
Jackson Square Partners made the following comment about The Boeing Company (NYSE:BA) in its Q3 2022 investor letter:
“For The Boeing Company (NYSE:BA)–in short, we believe the worst of Boeing’s idiosyncratic issues are behind it, the airframe duopoly remains as protected as ever, and at current prices (where we’ve been adding), the stock is trading around ~6x FCF on 2025E. Current airframe production is running materially below expected travel demand over the next 5-10 years, creating a structural supply/demand imbalance that we believe will drive a decade of strong growth in civil aerospace from here. In our 2Q’22 correspondence, we described the attributes of our ideal growth ballast and said we hoped to convert another in the coming months – we believe Boeing checks all those boxes.”
5. Super Micro Computer Inc. (NASDAQ:SMCI)
Number of Hedge Funds: 47
Super Micro Computer Inc. (NASDAQ:SMCI) is an IT company that provides high-performance computing and storage solutions. It designs and manufactures a range of server systems, workstations, and storage products, catering to various industries including cloud computing, data centers, and enterprise applications. Its products are designed to meet the demanding requirements of modern computing environments, offering high performance, reliability, and scalability.
The company experienced substantial growth in FQ4 2024, with revenue surging 142.95% year-over-year. Annual revenue for fiscal year 2024 increased by 110%. While earnings per share of $6.25 missed market expectations by $1.89, the company has accelerated production, now manufacturing 5,000 racks and over 2,000 direct liquid cooling racks monthly.
In June, it expanded its manufacturing capacity with the addition of 3 new facilities in Silicon Valley and other regions. It also recently launched a new line of servers powered by Intel’s Xeon processors. These servers feature advanced architectures, including 10U and multi-node form factors, to support next-generation GPUs and higher CPU core densities.
On September 30, the company underwent a 10-for-1 stock split. This move aims to make its shares more accessible to investors. While the split itself doesn’t change the company’s fundamentals, it could potentially attract more retail investors.
It has rapidly expanded its market presence through strategic growth in Asia and a focus on developing high-value AI solutions. Innovative products, like liquid cooling clusters and cutting-edge X14 and H14 systems, have been instrumental in driving AI adoption. The company remains a compelling investment opportunity with a solid financial foundation, innovative product offerings, and significant growth potential in the AI server market.
Carillon Scout Mid Cap Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q2 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) was the top detractor to returns in the second quarter. Super Micro designs and manufacturers server solutions based on modular and open-standard architecture. This modular approach combined with a strong engineering culture helps the company to supply the market with advanced servers and rack-scale compute solutions quickly. After an impressive return in the first quarter, the company offered disappointing near-term earnings guidance, though we do not believe its long-term opportunity has diminished. We expect continued strong growth for several years, although the range of outcomes is quite wide; it is difficult to forecast AI server market growth with precision.”
4. Carnival Corp. (NYSE:CCL)
Number of Hedge Funds: 53
Carnival Corp. (NYSE:CCL) is the world’s largest leisure travel company with 87 ships sailing under 9 brands including Princess, famously known as the line of the Love Boat, and Cunard which built the world’s biggest ocean liner at the time, Queen Mary 2, even boasting a planetarium on board. It offers a range of cruise vacations, including Caribbean, Mediterranean, and Alaskan itineraries.
The company’s strategic repositioning of cruises to emerging markets like Asia-Pacific is helping to balance demand in traditional regions like the Caribbean and Mediterranean. This allows for better pricing optimization. As European demand and occupancy rates normalize, it is expected to see improved financial performance.
In the third fiscal quarter of 2024, the sales were up 15.2% year-over-year, recording a revenue of $7.90 billion. Operating income was up 20%, customer deposits another 30%, and booking levels were up 25% from a year-ago period. Yields increased significantly by 12%, driven by strong per diem growth of 6% and an increase in passenger cruise days of 10%.
The company has announced a significant expansion of its fleet with the order of 3 new liquefied natural gas (LNG)-powered cruise ships, set for delivery in 2029, 2031, and 2033. This agreement with the Italian shipbuilder Fincantieri marks a pivotal moment for the company, as these vessels will be the largest in its global fleet, each measuring approximately 230,000 gross tons and designed to accommodate nearly 8,000 guests at full capacity across more than 3,000 staterooms.
Wall Street analysts are optimistic about Carnival Corp. (NYSE:CCL). They anticipate continued strong demand for cruises and believe the company is well-positioned to capitalize on this growth. Its strong market presence gives it a competitive advantage, enabling it to differentiate itself and optimize its sales strategies.
3. Nike Inc. (NYSE:NKE)
Number of Hedge Funds: 66
Nike Inc. (NYSE:NKE) is a footwear and apparel corporation and the world’s largest supplier of athletic shoes and apparel. It’s a major manufacturer of sports equipment, renowned for its athletic performance products, stylish designs, and successful marketing campaigns. It has a strong global presence and is one of the most valuable brands in the world.
The company experienced a slight decline of 1.71% year-over-year revenue in the closing fiscal quarter of 2024. While the sales recorded missed Street estimates, they still amounted to $12.61 billion.
The sales growth slowed significantly in fiscal 2024, reaching a decade-low compared to the previous year, attributed to a decline in the lifestyle business, down 10%, and weaker-than-expected performance in the basketball and running segments, down 5%. Online sales were also impacted by a higher proportion of lifestyle products, and promotions, and fewer sales of popular franchises like the Air Force
The macroeconomic environment in China led to a decline in traffic across all channels beginning in April, down 15%. Still, sales in China exceeded market expectations. Sales in North America, Europe, the Middle East, Africa, and Asia Pacific fell short of analyst estimates by 3%, 1%, 2%, and 3%, respectively.
It’s accelerating product development through its Express Lane initiative, using digital tools and partnerships to streamline processes. The company has also restructured and invested in consumer-facing activities, focusing on sports and innovation to drive product momentum.
Nike Inc. (NYSE:NKE) remains a strong investment despite recent challenges. Its robust financial position provides a solid foundation for future growth. As the dominant player in the footwear market, which is expected to grow from $173.89 billion in 2024 to $242.33 billion by 2029, the company is well-positioned to capitalize on market trends.
Mar Vista Focus strategy stated the following regarding NIKE, Inc. (NYSE:NKE) in its Q2 2024 investor letter:
“NIKE, Inc.’s (NYSE:NKE) stock declined following management’s revised forecast for fiscal year 2025, projecting negative mid-single-digit revenue growth instead of the previously anticipated positive growth. The company has observed a marked slowdown in lifestyle product sales since April, a trend that persisted into June. Our current projections indicate that both sales and earnings will fall 15-20% below the conservative estimates set by management just a quarter ago. This substantial downward revision in sales and earnings is attributed to insufficient product innovation, wholesale channel shift, and intentional reduction of supply in lifestyle franchises. While the negative adjustments to guidance could potentially act as a clearing event for the stock, the degree of conservatism in the new projections remains uncertain.
Nike maintains its position as the global leader in sportswear. However, its revenue growth has been hampered by a lack of innovation, and its recovery is further complicated by deteriorating macroeconomic conditions in the US and China. The company’s renewed focus on innovation and efforts to re-engage with wholesale channels may eventually help restore growth, but we believe increased skepticism regarding management’s ability to execute is justified.”
2. Alibaba Group Holding Ltd. (NYSE:BABA)
Number of Hedge Funds: 91
Alibaba Group Holding Ltd. (NYSE:BABA) is a technology company specializing in e-commerce, retail, Internet, and technology. It operates in sectors like retail, cloud computing, fintech, and logistics. It has also made significant investments in other technology companies and has a substantial presence in the global market.
The company has been at the forefront of AI technology for years, utilizing AI chatbots and investing heavily in its cloud business. The cloud segment uses AI to provide personalized suggestions and is developing a powerful large language model, Qwen 2.0. The positive growth of its AI cloud platform demonstrates strong user adoption. It has also recently launched around 100 new open-source AI models.
It offers various e-commerce platforms, including wholesale (1688.com, Alibaba.com), retail (AliExpress), and regional marketplaces (Lazada, Trendyol, Daraz). It generates revenue through commissions and has a dominant market share in China, accounting for 40% of the total e-commerce GMV.
Alibaba Group Holding Ltd. (NYSE:BABA) reported a 4.59% increase in revenue for FQ1 2025. The e-commerce business grew by 4%, with international ventures like Lazada and AliExpress experiencing a 32% surge in sales. The cloud division saw a 6% increase in revenue, and AI-related products achieved a remarkable 155% year-over-year growth.
The company is driving growth in the competitive e-commerce market through its innovation. Its recent fee increase announcement has positively impacted market sentiment. With a rapidly expanding market, it is well-positioned for long-term growth due to its competitive advantage and strong brand.
O’keefe Stevens Advisory stated the following regarding Alibaba Group Holding Limited (NYSE:BABA) in its Q2 2024 investor letter:
“We initiated two new positions during the quarter: Alibaba Group Holding Limited (NYSE:BABA) and Perrigo (PRGO). Both have seen their stocks decline over 70%+ from their all-time highs.
Alibaba is the largest e-commerce player in China, with 40% gross merchandise volume (GMV) market share through its Taobao and T-mall businesses. While the cloud computing business is relatively small, its 37% market share in China positions it well to capitalize on the increasing demand for AI-related products. In the most recent quarter, AI-related cloud revenue recorded triple-digit growth y/y, with the expectation that total cloud revenue will accelerate to double-digit growth in 2H 2025.
It’s rare to find a dominant market share business with significant tailwinds trading for ~10x adj. EPS. After accounting for their ~$60B net cash balance sheet, the stock is trading at 6-7x, which, we believe, is far too cheap. We understand this business would not trade at this price if it were a U.S. business. However, the valuation gap at a high single-digit P/E is pricing in a combination of the following risks – 1. China invading Taiwan. 2. Cash can never leave mainland China (disproven). 3. Increasing competition from Pinduoduo and Shien resulting in market share loss 4. China’s geopolitical tensions worsen. 5. Economic slowdown stemming from the recent housing market downturn. 6. VIE structure creates doubt over the actual ownership of the business. All risks have merit, with cash distribution restrictions at the lower end due to the recently announced dividend and special dividend. Cash returned to shareholders totaled $16.5B in FY24, up from $13.4B in FY23…” (Click here to read the full text)
1. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Funds: 108
Advanced Micro Devices Inc. (NASDAQ:AMD) is a fabless semiconductor company that designs, develops, and sells computer processors and related technologies for business and consumer markets.
Revenue growth in Q2 2024 was 8.88% compared to the year-ago period, driven by higher-than-anticipated sales of Instinct, Ryzen, and EPYC processors. The data center revenue grew 49% year-over-year. Ryzen CPU sales increased 49% over the year. Gaming revenue declined 59% due to decreased PlayStation and Xbox sales, but Radeon 6000 GPUs saw a year-over-year sales increase.
The company’s Instinct MI300X AI accelerators are gaining recognition for their impressive price-to-performance ratio, playing a crucial role as Microsoft aims to sell up to 50 million AI-enabled PCs. Launched in 2023, the MI300 Series competes directly with Nvidia’s H100, featuring both AI and HPC chips.
Strong shipments of the MI300 GPUs and increased adoption of Advanced Micro Devices Inc.’s (NASDAQ:AMD) EPYC CPUs have driven growth in the data center segment, with several hyperscalers opting for EPYC processors. The upcoming launch of the MI325X, which promises 2x the memory capacity and 1.3x better performance than its competitors, is expected to further boost sales. Additionally, the recently reviewed Zen-5 Turin processors are anticipated to enhance revenue in the latter half of the year.
This collaboration underscores Advanced Micro Devices Inc.’s (NASDAQ:AMD) strategic importance in Microsoft’s AI initiatives, particularly as the MI300X accelerators are integrated into Azure’s infrastructure, enhancing performance for demanding AI workloads. The company’s strong results and AI investments suggest a promising future in the AI market. It will benefit greatly from the growing AI spending.
Columbia Threadneedle Global Technology Growth Strategy stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) lagged the market after the company reported earnings results that, while generally strong, left the market wanting more. The company reported AI revenue of ~$600 million and increased its forward-looking outlook for AI revenue growth, but shares took a breather, as results missed elevated expectations after the stock’s strong performance. Despite the stock’s underperformance during the quarter, the company’s AI story remains very much intact. The growth outlook for the company is supported by better cloud demand, enterprise recovery and continued share gains ahead of the company’s new AI product launch.”
As we acknowledge the growth potential of Advanced Micro Devices Inc. (NASDAQ:AMD), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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