We recently published a list of Top 10 AI Stocks Buzzing on Latest News. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against other top AI stocks buzzing on latest news.
Investors are continuing to assess the impact of new LLMs in the AI industry. X. Eyeé, CEO of AI consulting firm Malo Santo and senior policy advisor at the Goldman School of Public Policy at UC Berkeley, said in a recent program on CNBC that the DeepSeek breakthrough in China has changed the dynamics of the AI race. She believes AI development is no longer limited to the companies with the “largest pockets.”
“I mean, the world has long looked to the United States to be the leader in artificial intelligence, but these recent model releases from China have demonstrated its ability to leapfrog and catch up with us tech giants and achieve groundbreaking results without the luxury of advanced hardware, which is ultimately challenging everything that we thought was necessary for innovation in the AI space. See, what DeepSeek represents is that AI innovation isn’t necessarily driven by the companies with the largest pockets or the fanciest hardware, but that collaborative development approaches can actually end up providing market-leading technologies.”
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For this article, we picked 10 AI stocks making the biggest moves these days. With each stock we have mentioned the number of hedge fund investors. 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).
10 Important AI Announcements for Investors
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Investors: 107
Christopher Rolland, Susquehanna Senior Analyst, explained during a latest program on CNBC that data center business numbers were the reason why Advanced Micro Devices Inc (NASDAQ:AMD) shares fell after its latest quarterly results. He believes data center is one of the most important parts of the AMD story. However, he said there’s an upside to Advanced Micro Devices, Inc. (NASDAQ:AMD) stock:
“We think Advanced Micro Devices Inc (NASDAQ:AMD), just on the server side and a few other things like embedded, which is FPGA, and then we’re not counting this MI300 AI opportunity out entirely. We do think that these all give the stock quite a bit of optionality, so we do like it from here. We think there is upside.”
The analyst was asked why Advanced Micro Devices, Inc. (NASDAQ:AMD) shares have been under pressure over the past few months. Here is what he said in response:
“I think it’s all summed up in expectations, particularly for MI300. There are numbers like $11 or $12 billion in 2025 MI300 revenue, and I think the buy side now is about half of that—$6 to $7 billion for the upcoming year. That, I think, is almost 100% of the drop we’ve seen in the stock price since last March.”
Advanced Micro Devices (NASDAQ:AMD) bulls believe the market should stop comparing the company’s chips with Nvidia and focus on its data-center growth and its competitive edge over other players like Intel. Advanced Micro Devices (NASDAQ:AMD)’s strong growth in the data center segment is indeed impressive, driven by Instinct GPU shipments and strong sales of EPYC CPUs. Advanced Micro Devices (NASDAQ:AMD) will continue to benefit from organic growth catalysts in this segment despite the competition from Nvidia. According to Goldman Sachs Research, global data center demand could surge by 160% by 2030. In the U.S., data centers are projected to use 8% of total power by 2030, up from 3% in 2022. McKinsey estimates that adding the required U.S. capacity will need over $500 billion in infrastructure investment by the decade’s end.
White Falcon Capital Management stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its Q4 2024 investor letter:
“During the year, we sold half of our stakes in Advanced Micro Devices, Inc. (NASDAQ:AMD) and Nu Holdings as they reached their intrinsic values. However, the decline in these stocks toward the end of the year provided us with an opportunity to add to our positions. In AMD’s case, the market has been disappointed by the company’s potential shortfall in AI chip revenues, which were previously forecasted to reach $10 billion in 2025. However, the factors required to justify the investment when the stock is priced at $220 per share are vastly different from those needed when the stock is at $120 per share. Yes, AMD’s AI chips and associated software are not competitive with Nvidia but this is now known and in the valuation. We believe this hyperfocus on AI ignores AMD’s other businesses where they continue to take advantage of Intel’s missteps. Importantly, AMD retains the potential to capture a small share of the AI chip market, which, given the market’s massive size, could be highly impactful for the company.”
Overall, AMD ranks 6th on our list of top AI stocks buzzing on latest news. While we acknowledge the potential of AMD, our conviction lies in the belief that under the radar 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 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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