Cathie Wood and Stanley Druckenmiller are looking at the same AI chip stock and moving in opposite directions.
ARK Invest sold 25,917 Advanced Micro Devices, Inc. (NASDAQ:AMD) shares across four ETFs on August 17 while simultaneously adding Nvidia across five funds. The move continued a pattern of trimming AMD exposure: ARK’s second-quarter filing showed about 1.42 million AMD shares at the end of June, down 48% from the previous quarter.
Stanley Druckenmiller’s Duquesne Family Office went the other way. Its Q2 filing disclosed a new 72,900-share AMD position while the firm exited Broadcom, Micron and Intel. The filing does not reveal exactly when during the quarter Druckenmiller established the stake, but the portfolio shift is striking: one famous growth investor is reducing AMD while another veteran macro trader has started building exposure.
Why Druckenmiller May See More Upside
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s operating momentum makes the bullish case easy to understand. Second-quarter revenue jumped 50% year over year to $11.54 billion, while Data Center revenue more than doubled to $6.72 billion. Management guided third-quarter revenue to about $13 billion, above Wall Street expectations.
The bigger prize arrives with the MI450 generation and Helios rack-scale systems. AMD has agreements with Anthropic for up to 2 gigawatts of MI450 deployments, while Microsoft plans to deploy Helios and next-generation EPYC processors across Azure. That gives AMD a credible route from being Nvidia’s distant GPU challenger to becoming a broader AI-infrastructure supplier.
Why Wood May Be Trimming
It’s about price. AMD recently traded around 70 times forward earnings, a valuation that already assumes years of exceptional AI growth. Investors demonstrated how unforgiving that setup can be after the August 4 earnings report: AMD beat quarterly estimates and guided revenue above consensus, yet the shares still fell sharply after hours because expectations were even higher.
Wall Street shows the same tension, going by the fact that Wells Fargo carries a $700 target, while Morgan Stanley sits at $465 with an Equal-Weight rating. AMD can execute spectacularly well and still disappoint if earnings estimates do not rise fast enough to support the multiple.
Insider Monkey’s Q2 data showed mixed hedge-fund positioning in AMD. D.E. Shaw cut its common-stock stake by 21%, while Marshall Wace increased its position by 3%. Short interest remained modest at 37.75 million shares, or about 2.32% of float, as of July 31.
The split between Wood and Druckenmiller therefore looks less like a disagreement about whether AMD belongs in the AI race and more like a disagreement about how much future success is already priced in. AMD’s growth and customer pipeline remain pretty compelling, but the current multiple leaves little room for ordinary execution. The risk-reward calculus becomes substantially more attractive if valuation cools while MI450 demand continues to strengthen.
While we acknowledge the risk and potential of AMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMD and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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