Jefferies’ Top Crowded Semiconductor Short Positions: Top 10 Stocks

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

Number of Hedge Fund Holders In Q2 2024: 108

Shares Short % Of Outstanding: 2.76%

Advanced Micro Devices, Inc. (NASDAQ:AMD) is a semiconductor design company. The firm designs and sells CPUs and GPUs for a variety of use cases. These include personal computers, gaming consoles, data centers, and AI use cases. This makes Advanced Micro Devices, Inc. (NASDAQ:AMD) the only firm in the world that simultaneously competes with both NVIDIA and Intel. The firm has benefited from Intel’s struggles and leverages product design along with TSMC’s manufacturing technologies to gain market share over the larger firm. Additionally, in a price-constrained environment, Advanced Micro Devices, Inc. (NASDAQ:AMD) benefits because of its affordability, and its smaller size also easily captures market share. The firm has been making aggressive investments in AI recently through multiple acquisitions that are aimed at bolstering its position in the data center industry. However, these acquisitions come at a cost and Advanced Micro Devices, Inc. (NASDAQ:AMD) has been debt-stressed until very recently so future leverage might create a headwind.

Baron Funds mentioned Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q2 2024 investor letter. Here is what the fund said:

“Advanced Micro Devices, Inc. (AMD) is a global fabless semiconductor company focusing on high performance computing technology, software, and products including CPUs, 9 GPUs, FPGAs, 10 and others. Shares of AMD remain volatile, and after a strong run earlier in the year, the stock fell during the quarter as investors continue to wrestle with AMD’s competitive positioning in the AI compute market relative to NVIDIA, who continues to strengthen its full-system solution offerings at a rapid pace. AMD also updated its MI300 GPU chip revenue expectations for the full year to “greater than $4 billion” vs. prior $3.5 billion, which disappointed the market a bit relative to high expectations. Over the long-term, we believe AMD, with its unique chiplet-based architecture and open-source software ecosystem, will play a meaningful role in the rapidly growing AI compute market, where customers don’t want to be locked into a single vendor and AMD offers a compelling total-cost-of-ownership proposition, especially in inferencing workloads. Simultaneously, we believe AMD will continue to take share from Intel within traditional data center CPUs, which, while now a slower growth market, is likely to see a near-term refresh as data centers look for ways to improve energy efficiency and optimize existing footprints.”