1. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a leading semiconductor company that uses AI to optimize chip design, improve manufacturing processes, and develop AI-accelerated hardware and software solutions. AMD’s AI-powered technologies help drive innovation in various industries, including gaming, data centers, and scientific computing.
Microsoft recently praised its Instinct MI300X AI accelerators as the best price-to-performance AI chip. This is significant as Microsoft expects to sell up to 50 million AI-enabled personal computers soon. The Instinct MI300 Series accelerators, launched in 2023, include AI and HPC chips that compete with Nvidia’s H100.
CEO Lisa Su highlighted the growing AI traction for its Instinct MI300X solutions. As leading cloud and enterprise providers expand their offerings, demand for AMD’s AI chips is increasing. Additionally, Su noted positive demand signals for general-purpose compute in both client and server processor businesses.
In Q2, the data center revenue grew 49% year-over-year. Overall revenue growth was 8.88% for the quarter, recording a total revenue of $5.84 billion. 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 strong results and AI investments suggest a promising future in the AI market. It will benefit greatly from the growing AI spending. 108 hedge funds held long positions in this company by June 30. Fisher Asset Management had the largest stake, valued at $3,755,355,818.
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.”
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 the ones on our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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