We recently compiled a list of the 11 Trending AI News and Ratings. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against the other trending AI stocks.
AI continues to be a transformative force, which is driving advancements across industries through improved infrastructure, data analytics, and automation. Its adoption is reshaping almost every sector in the market, including manufacturing, cloud computing, and robotics. Even though some challenges can be in scaling applications and managing demand, the long-term potential for AI to revolutionize industries and create new growth opportunities seems undeniable.
Investing in Long-Term Trends and AI Potential
In a Bloomberg interview, Lei Qiu, CIO for Thematic Innovation Equities at AllianceBernstein, discussed her team’s approach to identifying major long-term trends that drive equity growth beyond economic cycles. The firm focuses on significant themes, such as AI, which dominated 2023 and 2024. In addition to enabling AI infrastructure, they are closely monitoring the adoption of AI applications, including advancements in data analytics, cloud migration, networking, and communication equipment, which are significant for connecting smaller, more power-efficient data centers.
Qiu highlighted how automation and AI are already improving efficiency in industries like manufacturing, where companies are realizing substantial cost savings. She also mentioned the potential for related areas such as robotics, autonomous systems, and the Internet of Things to grow in 2025.
On the topic of M&A, Qiu acknowledged its potential resurgence, supported by favorable regulatory environments and strong company balance sheets. However, as an investor, she mentioned the challenge of predicting specific transactions. She also stressed the importance of stock selection and noted that not all ideas succeed without the right management, product, and execution.
Regarding macroeconomic influences, Qiu explained that while dramatic shifts, such as the sharp rate hikes in 2022, can impact long-duration assets, her team prioritizes fundamentals and long-term trends over short-term market timing. She concluded that secular growth themes remain central to the firm’s investment strategy.
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
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 275% since May 2014, beating its benchmark by 150 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: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) develops semiconductors, offering processors and graphics solutions for gaming, data centers, and embedded systems, with a focus on high-performance computing for AI applications.
Goldman Sachs downgraded AMD to Neutral from Buy and reduced the price target from $175 to $129. While the firm remains positive on AMD’s ability to gain market share from Intel in x86-based computing, concerns have risen over the impact of Arm-based custom CPUs and increasing competition in accelerated computing. These factors may slow AMD’s revenue growth, increase operating expenses, and pressure its stock multiple. The firm added:
“Since being added to the Buy list on 11/04/2020, the stock is up 50% vs. the S&P 500 at +72% over the same period. We believe this underperformance stems from weakness in PC and traditional end-demand, as well as slower-than-expected growth in Data Center GPUs.
We now expect the stock to remain range-bound until the market regains confidence in AMD’s future growth and margin trajectory.”
Overall AMD ranks 5th on our list of the trending AI stocks. While we acknowledge the potential of AMD as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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