We recently published a list of 12 AI Stocks on Analysts’ Radar. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against other AI stocks on analysts’ radar.
The recently imposed US sanctions on chip use have angered China. In recent news, the country has stated that it may take legal action against any individual or organization who are found assisting or implementing U.S. measures that advise companies against using their advanced semiconductors.
According to the U.S. published guidance, companies risk violating export controls if found using Ascend AI chips from Shenzhen-based Huawei. In response, China’s commerce ministry said there could be “corresponding legal liabilities” against those involved in implementing U.S. measures and that it constitutes “discriminatory restrictive measures” against Chinese firms.
READ ALSO: 10 AI Stocks Investors Are Watching Today and 15 AI Stocks Surging on News and Analyst Ratings.
The sanctions are seemingly a new strategy adopted by the US to curb China’s progress in the AI arms race. The world is yet to watch the success of this strategy as opposed to the AI diffusion rule imposed earlier, which the world came to know had failed miserably after the arrival of DeepSeek.
Even Jensen Huang has deemed the AI diffusion rule to be a failure.
“All in all, the export control was a failure. The fundamental assumptions that led to the AI diffusion rule in the beginning, in the first place, has been proven to be fundamentally flawed.”
In fact, the sales block advanced AI chips to China, forcing companies to buy semiconductors from Chinese designers. It also pushed the country to invest aggressively in a robust supply chain that doesn’t rely on manufacturers outside the country.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds. The hedge fund data is as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close up of a complex looking PCB board with several intergrated semiconductor parts.
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 96
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops and sells semiconductors, processors, and GPUs for data centers, gaming, AI, and embedded applications. Bank of America Securities analyst Vivek Arya recently maintained a “Buy” rating on the stock and set a price target of $130.00. The firm believes that AMD holds strong potential for growth and profitability, and at the heart of this conviction lies the company’s impressive earnings potential.
The firm believes that AMD’s expected Earnings per Share (EPS) will significantly outpace Wall Street expectations for the coming years. The reason behind the optimism stands to be its continued market share gains in the CPU sector for both servers and PCs, along with the company’s strategic positioning in the rising AI market. This includes significant contracts in the Middle East and an encouraging pipeline of AI-related products.
Arya’s confidence also extends to AMD’s valuation, which is considered attractive due to its consistent management execution and capability to grow its topline and EPS at impressive rates. Moreover, while some big US active fund managers aren’t enthusiastic about AMD, its potential to capture a meaningful share of the AI accelerator market is a significant opportunity. The company has also recently expanded its stock buyback program further, boosting its long-term outlook. At the same time, Arya has noted challenges for the stock, such as geopolitical uncertainties, competitive pressures from larger AI players, and a possible Intel comeback under the new management.
Overall, AMD ranks 6th on our list of AI stocks on analysts’ radar. While we acknowledge the potential of AMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMD and that has 100x upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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