5 Hot Stocks to Buy According to Hedge Funds

4. Advanced Micro Devices, Inc. (NASDAQ:AMD)

Number of Hedge Fund Shareholders: 91

Year-to-Date Return (through June 5): 84.2%

Advanced Micro Devices, Inc. (NASDAQ:AMD) shares gained 50% in the first quarter and are having another strong second quarter to nearly double their value this year. Three semiconductor stocks cracked our list of the hottest stocks to buy according to hedge funds, and their most popular picks have also posted the biggest gains this year.

With Advanced Micro Devices, Inc. (NASDAQ:AMD), we’re now pushing into the first of four stocks that have delivered phenomenal returns so far in 2023. The chipmaker has fallen behind rival Nvidia in the AI race, but has scored a major victory on that front this year when it was announced last month that Microsoft is investing in and supporting the expansion of AMD’s AI chipmaking capabilities. AMD’s gaming segment also projects to be a strong growth driver for several years given it supplies all the chips for Sony’s PlayStation 5 and Microsoft’s Xbox Series X/S consoles, whose sales are projected to continue climbing over the next few years.

White Falcon Capital Management noted the market finally seems to understand how semiconductor-intensive AI is, which has helped to boost Advanced Micro Devices, Inc. (NASDAQ:AMD) shares this year according to the fund’s Q1 2023 investor letter:

“Last quarter we added Advanced Micro Devices, Inc. (NASDAQ:AMD) to the portfolio at 18x earnings and quickly made it into a top 5 position. At that time, Mr. Market was worried about earnings revisions for semiconductor stocks. In Q1 2023, it has been one of our best performing positions with the stock up 50%! In just three months, the market realized that Artificial Intelligence (AI) and related technologies require a lot of semiconductors. Mr. Market really is manic depressive but this volatility can give the enterprising investor just enough of a window to pick stocks with attractive risk rewards.”