Billionaire Phillipe Laffont’s Top 10 “Mostly AI” Stock Picks

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

According to Citi Bank’s analysts, Advanced Micro Devices, Inc. (NASDAQ:AMD) is expected to see its market share of the data center GPU market rise by 10% to $15 billion. A Buy rating was also highlighted by Citi analyst Christopher Danely on the stock with a $176 price target.

Coatue Management holds around 6.7 million shares in AMD that is worth $1.2 billion. Among the hedge funds being tracked by Insider Monkey, Texas-based investment firm Fisher Asset Management is a leading shareholder in Advanced Micro Devices, Inc. (NASDAQ:AMD) with 28 million shares worth more than $5 billion.

Currently Advanced Micro Devices, Inc.’s (NASDAQ:AMD) 2025 EPS forecast depicted the stock to be trading at around 28.6X forward P/E ratio, which is lower given Wall Street analysts expect Advanced Micro Devices, Inc. (NASDAQ:AMD) growth to be 33% this year and 59% next year.

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.”