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Why Traders Are Keeping a Close Eye on Advanced Micro Devices, Inc. (AMD) Today

Advanced Micro Devices, Inc. (NASDAQ:AMD) is in the spotlight today due to Apple Inc. (NASDAQ:AAPL) announcing that it will drop the use of Imagination Technologies’ IP in 15-24 months. Instead of using Imagination’s services, Apple has implied that it might use its own in-house graphics technology. The news is relevant to AMD because some traders fear Apple could eventually do the same for GPUs in MACs and potentially cost AMD market share.

With that being the case, Advanced Micro Devices, Inc. (NASDAQ:AMD) shares are actually modestly in the green today as the market apparently isn’t too concerned about the possibility. Many traders still believe the odds of such event to be low. As it currently stands, AMD and Nvidia laptop GPUs are still top-tier.

What Does The Smart Money Sentiment Say?

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 39.7% gains over the past 12 months and outperformed the 24.1% gain enjoyed by the S&P 500 ETFs. Our enhanced small-cap hedge fund strategy returned more than 45% over the last 12 months and outperformed SPY by more than 30 percentage points over the last 4.5 years (see details here).

According to our data, hedge fund sentiment around AMD was mixed in the fourth quarter. Although the number of elite funds holding shares fell by 15 quarter-over-quarter to 32, the amount held increased to $857.62 million from $644.56 million. Kenneth Tropin‘s Graham Capital Management was one of the bulls, increasing its stake by 305% to 40.5 million shares.

The Bottom Line

Traders are watching Advanced Micro Devices, Inc. (NASDAQ:AMD) after Apple Inc. (NASDAQ:AAPL) showed some of its muscle, announcing that it will eventually in-house certain services it currently derives from Imagination Technologies. For those of you interested, also check out, the 7 Best Nanotechnology Engineering Schools in the World.

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