5 Stocks That Will Own the Metaverse

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

Number of Hedge Fund Shareholders: 88

Advanced Micro Devices, Inc. (NASDAQ:AMD)’s Radeon GPUs account for about 13.7% of all GPU sales, with particularly strong representation in laptops. The company is also making inroads in the discrete graphics market, slowly eating into Nvidia’s dominant position in that space.

Meta Platforms is also collaborating with AMD in its efforts to build out the metaverse, though not in the way one might envision. Instead, the social media giant will use AMD’s Xilinx Zynq UltraScale RFSoC radio chip to build cheaper Evenstar radio units, which Meta Platforms is looking to deploy aggressively to expand broadband coverage around the world and connect more people to the metaverse.

Unlike most other chipmakers, which hedge funds have shied away from in recent quarters, ownership of Advanced Micro Devices, Inc. (NASDAQ:AMD) has jumped by 26% over the past two quarters to hit an all-time high. Karl Richter’s Sora Investors and Josh Resnick’s Jericho Capital Asset Management were among the many funds to initiate positions in AMD during Q2.

The Baron Opportunity Fund likes the steps Advanced Micro Devices, Inc. (NASDAQ:AMD) has taken to gain share in the PC market and expand its data center capabilities, as detailed in the fund’s Q2 2022 investor letter:

“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global fabless semiconductor company focusing on high-performance computing technology, software, and products. AMD designs leading high-performance central and graphics processing units (known as CPUs and GPUs) and integrates them with hardware and software to build differentiated solutions for customers.

AMD has been gaining meaningful share in personal computing and server end markets over the past several years driven by the performance of its processors and technology and strong execution against its technology roadmap, and we believe share gains will continue over the coming years from a combination of AMD’s continued advancements and Intel’s stumbles in developing its leading-edge technology.

Additionally, the recently closed acquisitions of Xilinx and Pensando enhance AMD’s positioning within the data center, a key growth engine for the semiconductor industry, and Xilinx specifically opens up several new growth opportunities in new end markets like industrial, automotive, and communications. The company also generates significant cash flow, giving it capital allocation optionality for further M&A and returning capital to shareholders.”