We recently published a list of Top 10 Latest AI News, Earnings and Analyst Ratings You Should Not Miss. Since Advanced Micro Devices, Inc (NASDAQ:AMD) ranks 7th on the list, it deserves a deeper look.
Tech stocks are continuing to decline amid fears the Fed is taking too long to begin interest rate cuts, stoked by the latest jobs data that showed unemployment is rising. However, some analysts believe the latest decline in AI stocks is part of a normal market rotation and gives investors an opportunity to buy. While talking to CNBC in a latest program, Michael Landsberg of Landsberg Bennett Private Wealth said that the latest decline is a “little bit of a reset, obviously.” The analyst said that AI stocks had a “great run” and the latest pullback is a “typical process” of market rotation.
“It doesn’t mean we are not positive longer term on AI but when you have big runs like that that’s why you rebalance portfolios to keep the risk in check,” Landsberg said.
Asked if the AI bubble has popped and this is the end of the AI hype, the analyst said “absolutely not” and called the recent pullback “deceleration” from growth and “normalization.”
Landsberg said that the earnings season will “separate the wheat from the chaff” and believes major tech companies will still drive earnings in the future.
For this article, we scanned the latest AI news, earnings, and analyst ratings and picked the 10 biggest stocks moving on these developments. With each company, we have mentioned the number of hedge fund investors. 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).
Advanced Micro Devices, Inc (NASDAQ:AMD)
Number of Hedge Fund Investors: 124
Advanced Micro Devices, Inc (NASDAQ:AMD) impressed Wall Street with solid second-quarter results amid strong data center revenue. Data center revenue in the period grew 49% year over year.
But can Advanced Micro Devices, Inc (NASDAQ:AMD) continue gaining in the coming months? Analysts are hopeful amid the launch of its Instinct™ MI300 Series accelerators that are designed for AI and HPC workloads. The new chip competes with Nvidia’s H100 AI chip. Advanced Micro Devices, Inc (NASDAQ:AMD) now plans to release new AI chips annually, including the MI325X in Q4 this year, the MI350 in 2025, and the MI400 in 2026. Advanced Micro Devices, Inc (NASDAQ:AMD) said MI350 would be a competitor to Nvidia’s Blackwell.
Advanced Micro Devices, Inc (NASDAQ:AMD) data center business doubled its revenue but this growth was not at the cost of profits. The segment’s operating income increased by 405% compared to the year-earlier period. However, Advanced Micro Devices, Inc (NASDAQ:AMD) data center business is still very small compared with NVDA. It generated about $2.8 billion in revenue vs. $22.6 billion in quarterly revenue for NVDA. However, Advanced Micro Devices, Inc (NASDAQ:AMD) CPU and GPU businesses are also thriving. Ryzen CPU sales increased 49% over year and slightly quarter over quarter. Although gaming revenue declined 59% due to decreased PlayStation and Xbox sales, Advanced Micro Devices, Inc (NASDAQ:AMD) Radeon 6000 GPUs saw a year-over-year sales increase.
Advanced Micro Devices, Inc (NASDAQ:AMD) is trading 17% below its 3-year average P/E ratio. The company is estimated to grow its EPS by 43% in the long term, compared to 33% for Nvidia. During the third quarter, its revenue growth is expected to come in at 15% on a QoQ basis. Amid growth forecasts based on new chips and an expected increase in AI spending by other companies, Advanced Micro Devices, Inc (NASDAQ:AMD) forward P/E of 38 makes the stock undervalued at the current levels.
Overall, Advanced Micro Devices, Inc (NASDAQ:AMD) ranks 7th on Insider Monkey’s list titled Top 10 Latest AI News, Earnings and Analyst Ratings You Should Not Miss. While we acknowledge the potential of Advanced Micro Devices, Inc (NASDAQ:AMD), our conviction lies in the belief that AI stocks hold greater promise for delivering higher 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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Disclosure: None. This article is originally published at Insider Monkey.
