Jim Cramer’s Latest Calls: 10 Stocks to Buy or Sell

2. Advanced Micro Devices Inc (NASDAQ:AMD)

Number of Hedge Fund Investors: 107

Jim Cramer in a latest program on CNBC commented on a recent bearish report on Advanced Micro Devices Inc (NASDAQ:AMD) by Goldman Sachs. Here is what Cramer said:

“Piece by Goldman Sachs, really, really good one. It really has a lot, wide-ranging both on capital equipment and the regular just semis. But we reduce our 2025-26 revenue per AMD by 10 to 11%. You know, you can’t own a semiconductor stock when they cut number revenue, revenue growth estimates, and that’s very, very negative. And a lot of that is because they really have not been able to accelerate what they’re doing in the data center.”

Goldman Sachs downgraded Advanced Micro Devices (NASDAQ:AMD) from Buy to Neutral, cutting its price target from $175 to $129.

Goldman Sachs cited weaker PC, traditional server demand and slower-than-expected growth in data center demand for Advanced Micro Devices Inc (NASDAQ:AMD) processors as reasons for the rating action.

“We are increasingly concerned that the rise of Arm-based custom CPUs coupled with the competitive intensity in accelerated computing will weigh on AMD’s revenue growth relative to peers, exert upward pressure on Advanced Micro Devices Inc (NASDAQ:AMD) opex profile and, in turn, weigh on the stock’s multiple,” Goldman analysts said.

Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.

Rogue Funds stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q3 2024 investor letter:

“We sold our Advanced Micro Devices, Inc. (NASDAQ:AMD) puts for a sold profit after the Japan Carry Trade caused volatility to spike considerably and allowed for a significant increase in the value of our put options. I felt that was an ideal time to capture these profits which has turned out to be a good choice in hindsight.”