4. Advanced Micro Devices Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 108
Jim Cramer discusses Advanced Micro Devices, Inc. (NASDAQ:AMD), a technology company. He recently started buying Advanced Micro Devices, Inc. (NASDAQ:AMD) shares after the stock price dropped significantly in July. Despite strong financial results and positive future outlook, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s stock has continued to decline. Cramer believes that the current valuation is too low and that Advanced Micro Devices, Inc. (NASDAQ:AMD) is a good investment opportunity, especially considering its potential for growth under the leadership of CEO Lisa Su.
“Advanced Micro Devices, Inc. is an on-again, off-again Charitable Trust holding. By the way, we’ll be talking about it on Thursday at our monthly meeting. It’s now an “on” because we started buying some when it sold off in July. It actually began its slide in March and is now down close to 40% from its highs…
It’s the third-worst pullback of any chipmaker in the S&P 500. The stock is down 26% just from its lower high on July 10th. And even after rebounding a few bucks today, did you know that Advanced Micro Devices, Inc. is down for the year? Red for the year!
Really, Advanced Micro Devices, Inc.’s latest quarter was pretty good across the board. They posted modest sales and earnings beats, with better-than-expected guidance for the current quarter. The stock only jumped 4% on the news!
Now, Advanced Micro Devices, Inc. is expected to earn $5.45 per share next year, with that number growing to $7.24 per share in 2026. But in a few months, 2026 will be next year, at which point the stock would be selling for less than 20 times next year’s earnings. I believe in CEO Lisa Su, and I think Advanced Micro Devices, Inc. is a great buy into weakness. I’ve got to tell you, that puts it below a market multiple—and to me, that’s just wrong.”
A bullish thesis for Advanced Micro Devices, Inc. (NASDAQ:AMD) is built on its strong financial results and expanding presence in artificial intelligence (AI) and data centers. In Q2 2024, Advanced Micro Devices, Inc. (NASDAQ:AMD) delivered earnings per share of $0.69, surpassing expectations and beating revenue estimates by reporting $5.84 billion, an 8.9% year-over-year growth. This demonstrates the resilience of its products despite industry challenges.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is positioned to benefit from the growing demand for AI and data center solutions, with its recent partnerships, including one with AWS for cloud computing, highlighting its strength in these sectors. Its EPYC processors and Instinct accelerators are key to driving future revenue as AI adoption grows. As AI and data centers continue to expand, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s growth prospects are expected to remain strong, and analysts are projecting significant earnings growth over the next year, reinforcing its appeal as a long-term investment.
