11. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor company that offers x86 microprocessors and GPUs. It is based in Santa Clara, California.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is among the top semiconductor picks because it has been working to establish itself as a reasonable alternative to the pricy Nvidia. With the release of its AI GPU, the MI300, in 2023, Advanced Micro Devices, Inc. (NASDAQ:AMD) did manage to gain this reputation. The company has also been primarily benefiting from its AI business, which many investors take to mean that it has immense potential to keep growing.
However, those following Advanced Micro Devices, Inc. (NASDAQ:AMD) would be wise to keep in mind some of the challenges the company is facing. In the second quarter, its gaming and embedded segments struggled a bit since the gaming segment is cyclical and sees downturns between gaming console generations. The embedded segment has been working to high inventory levels, which have led to sales falling.
Because of these difficulties, Advanced Micro Devices, Inc. (NASDAQ:AMD) saw its second-quarter year-over-year revenue growth come in at only 9% – a small figure compared to market leader Nvidia with its triple-digit revenue growth. Despite this, Advanced Micro Devices, Inc.’s (NASDAQ:AMD) position as a robust runner-up in the AI chips space is enough to attract many investors who believe in the company’s potential to expand by taking market share from Nvidia.
In the second quarter, 108 hedge funds were long Advanced Micro Devices, Inc. (NASDAQ:AMD), with a total stake value of $10.3 billion. Fisher Asset Management was the largest shareholder, holding 23,151,197 shares.
Fred Alger Management mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD) in its second-quarter 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.”
