Where Do Hedge Funds Stand On Advanced Micro Devices, Inc. (AMD)?

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Advanced Micro Devices, Inc. (NASDAQ:AMD).

Advanced Micro Devices, Inc. (NASDAQ:AMD) shareholders have witnessed an increase in hedge fund sentiment lately. Advanced Micro Devices, Inc. (NASDAQ:AMD) was in 63 hedge funds’ portfolios at the end of June. The all time high for this statistic is 74. There were 62 hedge funds in our database with AMD positions at the end of the first quarter. Our calculations also showed that AMD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Mark Kingdon of Kingdon Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to go over the recent hedge fund action surrounding Advanced Micro Devices, Inc. (NASDAQ:AMD).

Do Hedge Funds Think AMD Is A Good Stock To Buy Now?

At second quarter’s end, a total of 63 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the first quarter of 2020. On the other hand, there were a total of 51 hedge funds with a bullish position in AMD a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the largest call position in Advanced Micro Devices, Inc. (NASDAQ:AMD), worth close to $1.6468 billion, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Fisher Asset Management, managed by Ken Fisher, which holds a $941.3 million position; 0.6% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group and Daniel Patrick Gibson’s Sylebra Capital Management. In terms of the portfolio weights assigned to each position Tairen Capital allocated the biggest weight to Advanced Micro Devices, Inc. (NASDAQ:AMD), around 17.96% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, designating 10.42 percent of its 13F equity portfolio to AMD.

As industrywide interest jumped, specific money managers were leading the bulls’ herd. Jericho Capital Asset Management, managed by Josh Resnick, assembled the biggest position in Advanced Micro Devices, Inc. (NASDAQ:AMD). Jericho Capital Asset Management had $196.4 million invested in the company at the end of the quarter. Larry Chen and Terry Zhang’s Tairen Capital also initiated a $102.6 million position during the quarter. The following funds were also among the new AMD investors: D. E. Shaw’s D E Shaw, David Fiszel’s Honeycomb Asset Management, and Mark Kingdon’s Kingdon Capital.

Let’s check out hedge fund activity in other stocks similar to Advanced Micro Devices, Inc. (NASDAQ:AMD). We will take a look at Zoom Video Communications, Inc. (NASDAQ:ZM), Diageo plc (NYSE:DEO), Square, Inc. (NYSE:SQ), Deere & Company (NYSE:DE), CVS Health Corporation (NYSE:CVS), Intuitive Surgical, Inc. (NASDAQ:ISRG), and ServiceNow Inc (NYSE:NOW). This group of stocks’ market valuations are closest to AMD’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 63.3 hedge funds with bullish positions and the average amount invested in these stocks was $4817 million. That figure was $4610 million in AMD’s case. Square, Inc. (NYSE:SQ) is the most popular stock in this table. On the other hand Diageo plc (NYSE:DEO) is the least popular one with only 20 bullish hedge fund positions. Advanced Micro Devices, Inc. (NASDAQ:AMD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AMD is 60.6. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. A small number of hedge funds were also right about betting on AMD as the stock returned 15.1% since the end of the second quarter (through 9/27) and outperformed the market by an even larger margin.

Suggested Articles:

• 15 Best Security Stocks to Buy Now
• 10 Best Finance Stocks To Buy Now
• 10 Best Real Estate Stocks To Buy Now

Disclosure: None. This article was originally published at Insider Monkey.