4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Volume: 39.618 million
Average Volume (3-Month): 52.122 million
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) produces semiconductor products and devices, such as microprocessors, chipsets, graphics, video, and multimedia products. It supplies these products to third-party foundries, providing assembling, testing, and packaging services.
The 2023 launch of its Instinct™ MI300 Series accelerators became a major contributor to the company’s growth. The year-over-year revenue growth in Q2 2024 was 8.88%, where the data center revenue alone grew 49%, offset by the 59% decline in gaming revenue due to a fall in PlayStation and Xbox sales.
Radeon 6000 GPUs saw a year-over-year sales increase. Ryzen CPU sales also increased 49% over the year. The company now plans on releasing new AI chips annually, including the MI325X by the end of 2024, the MI350 in 2025, and the MI400 in 2026.
In August, the company acquired Silo AI in a deal valued at $665 million, aiming to offer end-to-end AI solutions to customers using Silo AI’s expertise in developing LLMs . It also announced the definitive agreement to acquire privately held ZT Systems for $4.9 billion, which is expected to provide the company with expertise in AI infrastructure systems and services.
The PC market is currently growing because of the excitement around AI-enabled PCs. International Data Corporation (IDC) said that the PC market saw a 3% year-over-year increase in Q2. Advanced Micro Devices, Inc. (NASDAQ:AMD) will likely benefit from this trend. 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.
Alger Spectra Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a major global supplier of PC microprocessors and graphics processors to computing original equipment manufacturers (OEMs). The company’s product range spans desktops, notebooks, servers, graphics, and embedded/semi-custom chips. AMD operates in a large addressable market, covering areas such as PCs, servers, high-end gaming, and deep learning. Additionally, AMD has introduced competitive AI technologies, including powerful accelerators poised to capture a share in a market worth several hundred billion dollars. During the quarter, the company reported fiscal first-quarter operating results that met analyst estimates, with strengths in data center GPUs and server CPUs offsetting weaknesses in their gaming and embedded businesses. Moreover, management raised their fiscal second-quarter revenue guidance, albeit slightly below consensus estimates, where they expected double digit growth in data center revenues, while projecting a decline in their gaming segment, driven by weaknesses in both desktop GPUs and Semi-Custom Systems-on-a-Chip (SoC). While weaker-than-expected near-term results weighed on shares during the quarter, we believe the company is positioning itself to potentially benefit from long-term growth in AI infrastructure spending. Specifically, the company continues to gain server CPU market share, which could potentially accelerate as traditional compute deployments begin to recover.”
