04. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Price Reaction after the Upgrade: +9.87 (+5.86%)
On January 24, New Street embarked on a noteworthy upgrade within the semiconductor industry. The analysis focused on Advanced Micro Devices, Inc. (NASDAQ:AMD), recognizing its distinctiveness in the data center artificial intelligence (AI) chip sector. New Street upgraded Advanced Micro Devices, Inc. (NASDAQ:AMD) from Neutral to Buy on AI chip spending growth, coupled with a revised price target of $215. Following this strategic decision, the stock demonstrated a remarkable change, concluding with a substantial 5.86% increase on January 24. New Street’s upgrade offers a comprehensive perspective on Advanced Micro Devices, Inc. (NASDAQ:AMD), shedding light on the evolving dynamics and opportunities within the semiconductor and AI chip sector. New Street substantiated this upgrade by delving into the factors that set Advanced Micro Devices, Inc. (NASDAQ:AMD) apart in the data center AI chip space, elucidating the rationale behind the upgraded rating and target price. This upgrade unfolds in a technological landscape where the demand for powerful AI processing capabilities in data centers is on the rise, and companies like AMD are poised to capitalize on this growing trend. While the market responded with a substantial increase in the stock price on the day of the upgrade, New Street’s move implies a bullish trajectory for Advanced Micro Devices, Inc. (NASDAQ:AMD). The upgraded price target signifies confidence in AMD’s ability to navigate industry dynamics effectively and emerge as a key player in the flourishing AI chip market.
White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“It is important to note that the returns depicted above actually originated in the market turmoil of 2022 and were only realized in 2023. We assess that about 75% of the returns in 2023 were derived from just 35% of the portfolio. Notably, the technology companies we acquired in 2022 – Advanced Micro Devices, Inc. (NASDAQ:AMD), Amazon, Docebo, NU, Rover – performed exceptionally well. In hindsight, the decision to allocate to technology stocks appears straightforward; but it actually demanded courage and conviction to buy and add to these stocks during the fear and uncertainty of the 2022 bear market.
The top 5 positions in the portfolio were: Precious Metals royalty basket, Nu Holdings, AMD Amazon.com and Converge Technology Services. AMD has worked out great for us but we must admit that it has gotten expensive. AI was not part of our original investment thesis and AMD is a great reminder of how one can get ‘lucky’ investing in quality businesses run by competent management teams (ditto for Amazon).”
