3. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Jim Cramer pointed out that after a tumultuous year, Advanced Micro Devices, Inc. (NASDAQ:AMD), a favorite chip maker and a key part of his investment portfolio, is essentially unchanged for 2024. He noted that Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the few chipmakers competing with Nvidia in the artificial intelligence sector. Despite this, Advanced Micro Devices, Inc. (NASDAQ:AMD) has dropped about 80 points since its peak earlier this spring, leading Cramer to conclude that something isn’t quite right with the situation.
“After a roller coaster year, AMD, one of our favorite chip makers and a core holding in my travel trust, is basically flat for 2024. Remember, AMD is the only chipmaker that comes close to Nvidia in the artificial intelligence space, yet now the stock’s down roughly 80 points from its high this spring. Something’s wrong here.”
Advanced Micro Devices, Inc. (NASDAQ:AMD) has a strong positive outlook, highlighted by its impressive Q2 2024 performance, which surpassed analyst expectations with significant revenue growth fueled by high demand in the data center and gaming markets. Advanced Micro Devices, Inc. (NASDAQ:AMD) has effectively increased its market share in the EPYC server processor segment, benefiting from the rising need for cloud computing and AI applications.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s latest EPYC processors give it a competitive edge in high-performance computing, while the positive reception of its Radeon graphics cards shows its strong position in the gaming industry. Strategic partnerships with major cloud service providers enhance Advanced Micro Devices, Inc. (NASDAQ:AMD)’s market presence and create new revenue opportunities, especially in AI and machine learning.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s ongoing focus on innovation and research and development helps it stay competitive in both CPU and GPU markets. Recent announcements about new product launches and collaborations in the AI sector have further boosted investor confidence, reinforcing a strong outlook for Advanced Micro Devices, Inc. (NASDAQ:AMD).
Baron Technology 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 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.”
