Here’s Why You Should Not Bet on Advanced Micro Devices Inc. (AMD)

The stock of Advanced Micro Devices, Inc. (NASDAQ:AMD) has been advancing lately, currently trading almost 6% in the green over the last two days on the back of the cost-cutting plan announced last week. Among other things, Advanced Micro Devices intends to lay-off around 500 employees, representing 5% of its staff. In addition, the company plans to simplify its business and outsource some services and application development. Overall, the stock of the semiconductor company is down by over 33% since the beginning of the year.


The company has to show some results from its cost-cutting initiatives in order to win back the support of most investors. As of the end of June, the hedge fund sentiment towards Advanced Micro Devices, Inc. (NASDAQ:AMD) is rather bleak, as 15 funds from our database hold only 2.30% of the company’s outstanding stock. The only positive is that while the number of funds remained unchanged, the aggregate value of their holdings went up to $43.19 million from $36.33 million during the second quarter, amid an over 10% drop in the stock during the same period. Among these investors, the largest stakes are held by Cliff Asness‘ AQR Capital Management and Dmitry Balyasny‘s Balyasny Asset Management, which reported ownership of 3.02 million shares and 2.68 million shares. Morover, both investors boosted their positions during the quarter, while Balyasny also reported ownership of ‘Call’ options underlying 5.35 million shares of AMD.

However, despite the bullish trend that we can notice by looking at the top shareholders of Advanced Micro Devices, Inc. (NASDAQ:AMD) among the funds from our database, we also see that they allocated tiny portions of their equity portfolios to the investment. Combined with weak optimism from analysts (most have ‘Sell’ or ‘Hold’ ratings), it’s probably best to wait until the cost-cutting starts to positively reflect on AMD’s financial statements.

Disclosure: None